Seller Tax & Legal · High-Value Sales · Los Angeles
How Do You Avoid Measure ULA When Selling Your Los Angeles Home?
Justin Borges, DRE #01940318 · 9 min read
Measure ULA is a Los Angeles city transfer tax that adds 4% to home sales above $5,400,000 and 5.5% above $10,900,000 (thresholds effective for closings after June 30, 2026, per the LA Office of Finance), on top of the standard transfer tax. There is no legal exemption once a qualifying sale crosses the threshold, but sellers near the line have legitimate ways to manage exposure through accurate pricing, timing, and, in specific cases, entity or property structure.
What You Will Learn
- What Measure ULA Actually Charges, and Who It Applies To
- A Los Angeles Example: A Sale Just Above and Just Below the Threshold
- What Does Not Legally Avoid Measure ULA
- What Actually Reduces or Eliminates Your Exposure
- Why Property Location Inside vs. Outside LA City Limits Matters Most
- Frequently Asked Questions
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Reserve Your Free Seat →What Measure ULA Actually Charges, and Who It Applies To
Measure ULA, officially the Los Angeles "homelessness and housing solutions tax," took effect April 1, 2023, and it charges an additional documentary transfer tax on the sale of real property within the City of Los Angeles once the sale price crosses set dollar thresholds (Measure ULA, 2023). It applies on top of the existing base LA County and City transfer taxes that every sale already pays, not in place of them.
The thresholds are not fixed forever. The ordinance ties them to the Bureau of Labor Statistics Chained Consumer Price Index and resets them annually each July 1 (Measure ULA). When Measure ULA launched in April 2023, the lower threshold was set at $5,000,000. Following the most recent reset, the LA Office of Finance lists the current thresholds for closings after June 30, 2026 at $5,400,000 and $10,900,000 (finance.lacity.gov). A sale that closes above the lower threshold owes an additional 4% of the total sale price; above the higher threshold, the rate rises to 5.5%. Because these numbers move every year, always confirm the exact current figures with the LA Office of Finance before pricing a sale near the line.
Two details trip up almost every seller who first hears about this. First, the tax applies to the entire sale price once you cross the threshold, not just the amount above it. A home that sells for $5,450,000 does not owe 4% on the $50,000 over the line, it owes 4% on the full $5,450,000. Second, the tax is triggered by the property's location inside City of Los Angeles boundaries, not by county, ZIP code, or school district. A property in unincorporated LA County or in a separately incorporated city such as Pasadena, Glendale, or Beverly Hills is not subject to Measure ULA at all, regardless of price.
Sellers assume Measure ULA is a mansion tax that only touches celebrities and apartment syndicators. Then their Hancock Park listing appraises at $5.3M and the conversation changes fast.
Justin Borges, CA DRE #01940318A Los Angeles Example: A Sale Just Above and Just Below the Threshold
The dollar difference between landing just above or just below the lower Measure ULA threshold is large enough that it should factor directly into how a high-value LA listing gets priced and negotiated.
Sale Priced Just Below the Threshold
Sale Priced Just Above the Threshold
A $100,000 difference in final sale price, moving from $5,350,000 to $5,450,000, results in roughly $318,000 of additional cost to the seller once you add the $218,000 Measure ULA bill on top of the $100,000 higher price. That gap is exactly why accurate pricing and realistic negotiation near the threshold matter more on a Los Angeles luxury sale than almost anywhere else in the region. Sellers, agents, and buyers all have an incentive to understand exactly where a deal lands relative to the line before signing anything.
What Is My Home Worth in 2026?
Get a free, accurate valuation from Justin Borges, backed by real comps, not a Zestimate. Knowing exactly where your home lands relative to the Measure ULA threshold is the first step in planning a high-value LA sale.
Get My Free Home Valuation →What Does Not Legally Avoid Measure ULA
Several "workarounds" circulate among high-value sellers and their advisors. Most do not hold up, and some carry real legal risk on top of failing to save any money.
A 1031 exchange does not avoid it
A 1031 exchange defers federal capital gains tax (IRS) and the parallel California capital gains tax (Franchise Tax Board) by rolling proceeds into a replacement property. It has no effect on Measure ULA, because Measure ULA is a documentary transfer tax triggered when the deed records, not an income tax. The tax is owed and paid out of proceeds at close regardless of whether you plan to reinvest through a 1031, which reduces the equity actually available to roll into the next property.
Underpricing the home to duck the threshold is not a real strategy
Deliberately listing or accepting an offer below a property's true fair market value specifically to stay under the Measure ULA line creates an appraisal gap that can jeopardize the buyer's financing and invite scrutiny from lenders and the LA Office of Finance. Pricing a home accurately at fair market value, which may happen to land under the threshold, is entirely different and entirely legitimate. The number needs to follow reality, not the other way around.
Splitting a sale across entities rarely works
The ordinance includes anti-avoidance and aggregation language for related transactions. Attempting to break a single sale into multiple transfers, entities, or parcels to stay under the threshold is legally complex, frequently ineffective once the city applies aggregation rules, and requires a real estate attorney's review before anyone attempts it.
Seller financing or an installment sale does not delay it
Measure ULA is generally due based on when the deed transfers and records, not the payment schedule the buyer and seller privately agree to. Structuring a sale as an installment sale does not spread the tax obligation out over time the way it might for certain income tax questions. Confirm the specifics of any proposed structure with the LA Office of Finance or your closing attorney before relying on it.
To put the numbers in context: at $5.4 million the tax is $216,000 (4%), and at $10.9 million it rises to $599,500 (5.5%). Those are fixed charges due at the close of escrow regardless of how the transaction is structured, which is why the workarounds circulating in the market rarely change the final math.
What Actually Reduces or Eliminates Your Exposure
None of this means a high-value LA seller is powerless. A few genuinely legitimate levers exist, and I walk every seller near the threshold through each one before we set a list price.
| Strategy | Legitimate? | What It Actually Does |
|---|---|---|
| Accurate fair-market pricing | Yes | Reflects the home's real value; may land under the threshold without manipulation |
| Timing around the July 1 CPI reset | Yes, in limited cases | If a sale is already borderline and the timeline is flexible, closing on the favorable side of the annual reset can matter |
| Confirming the property sits outside LA city limits | Yes | Properties in unincorporated LA County or other incorporated cities are not subject to Measure ULA at any price |
| Full net-proceeds modeling before listing | Yes | Building Measure ULA into the estimated net proceeds up front avoids surprises at closing and informs negotiation strategy |
| 1031 exchange | No effect on ULA | Defers capital gains tax only; does not touch the transfer tax |
| Underpricing or entity splitting | No, high risk | Appraisal, lender, and anti-avoidance exposure with little to no real tax savings |
The annual reset date is worth planning around carefully, not gaming. If a sale is already going to close near July 1 for reasons unrelated to Measure ULA, understanding which side of the reset your closing date falls on is simply smart planning. Artificially delaying an otherwise unrelated sale purely to chase next year's reset date is a different, riskier calculation, since thresholds have historically moved up, but are not guaranteed to.
Of the legitimate options in the table above, confirming a property sits outside the Los Angeles city limits is the only one that eliminates Measure ULA entirely regardless of sale price. At a $6 million sale, that boundary determination is the difference between a $240,000 tax bill and zero.
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See Luxury Listings →Why Property Location Inside vs. Outside LA City Limits Matters Most
The single biggest factor in whether Measure ULA applies at all, more than price negotiation or timing, is whether the property sits inside City of Los Angeles boundaries. This is easy to get wrong because Los Angeles County contains dozens of separately incorporated cities, and neighborhood names do not always match municipal boundaries.
Properties in Beverly Hills, Culver City, Santa Monica, Pasadena, Glendale, San Marino, and unincorporated pockets of LA County are not subject to Measure ULA regardless of sale price, because the ordinance is a City of Los Angeles measure, not a countywide one. A $12M estate in Beverly Hills owes zero Measure ULA. A $12M estate in Bel Air, which is inside LA city limits, owes the 5.5% rate.
A property's exact jurisdiction should never be assumed from its neighborhood name or ZIP code alone. Title companies, the LA Office of Finance, and parcel records maintained by the LA County Assessor (LA County Assessor) can confirm the exact boundary status of a specific parcel, and that confirmation should happen early, before a listing strategy or price target gets set, on any property anywhere near the threshold.
If you are weighing whether to sell now or hold a high-value LA property, including whether relocating a sale conversation to a neighboring city's inventory makes sense for your situation, talk to Justin directly at (213) 262-5092.
Frequently Asked Questions
What is Measure ULA?
Measure ULA is a Los Angeles city transfer tax on real estate sales, adding 4% above $5,400,000 and 5.5% above $10,900,000 for closings after June 30, 2026, on top of standard transfer taxes. It applies only within City of Los Angeles boundaries.
Can you legally avoid Measure ULA when selling in Los Angeles?
There is no legal exemption once a qualifying sale within LA city limits crosses the threshold. Sellers can legitimately manage exposure through accurate pricing, timing, and confirming whether a property actually sits inside city boundaries.
Does a 1031 exchange help avoid Measure ULA?
No. A 1031 exchange defers capital gains tax, an income tax question. Measure ULA is a transfer tax triggered at deed recording and is owed regardless of whether you complete a 1031 exchange afterward.
Does the tax apply to the whole sale price or just the amount over the threshold?
The entire sale price. A home selling for $5,450,000 owes 4% of the full $5,450,000, not just 4% of the amount above the $5,400,000 threshold.
Is my home subject to Measure ULA if it is in Beverly Hills or Pasadena?
No. Measure ULA is a City of Los Angeles ordinance and only applies to properties within LA city limits. Separately incorporated cities like Beverly Hills, Pasadena, Glendale, and Culver City are not subject to it at any price.
Do the Measure ULA thresholds change every year?
Yes. The ordinance ties the thresholds to the Chained Consumer Price Index, and they reset annually on July 1, generally moving upward with inflation each year since the tax began in April 2023.
Can I underprice my home to stay under the Measure ULA threshold?
Deliberately pricing below fair market value to duck the tax creates appraisal and lender risk and is not a legitimate strategy. Pricing accurately at true market value, which may land under the threshold, is different and appropriate.
Related Resources
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- Experienced pricing and negotiating high-value Los Angeles sales near the Measure ULA threshold
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