Andres Diaz

Managing Director, Multifamily Investments · Kingside Investment Group

How Much Is the Measure ULA Tax When Selling an Apartment Building in Los Angeles?

For transactions closing after June 30, 2026, Measure ULA applies at 4% of the entire sale price on apartment buildings selling between $5,400,000 and $10,899,999, and at 5.5% on sales of $10,900,000 or more. On a $6,000,000 building, that is $240,000 owed at close, on top of standard city and county documentary transfer tax. Below $5,400,000, Measure ULA does not apply at all.

The thresholds reset every year on July 1 based on the BLS Chained Consumer Price Index, and the increase from $5,300,000 to $5,400,000 effective July 1, 2026 changes the math for any seller pricing a building near the line. If your building is worth $5.2M today, waiting a few weeks to close after July 1 could keep you under the new threshold entirely, or push you just over it, depending on where the final number lands. Getting this timing right is a six-figure decision.

This guide breaks down the exact rate structure, walks through worked examples at real price points, and explains how Measure ULA interacts with standard transfer tax, 1031 exchanges, and the way sellers structure deals to manage the exposure.

What Is Measure ULA

Measure ULA, commonly called the "mansion tax," is a documentary transfer tax that voters approved in November 2022 and that took effect April 1, 2023, under Los Angeles Municipal Code Section 21.9.2. It applies to sales of real property within the City of Los Angeles above a set dollar threshold, and the revenue funds affordable housing and homelessness prevention programs administered by the city.

Despite the "mansion tax" nickname, Measure ULA applies to every property type above the threshold, not just single-family homes. Apartment buildings, commercial property, and vacant land all trigger the tax if the sale price crosses the line. For multifamily sellers, this means a building's Measure ULA exposure has to be modeled into net proceeds calculations from the very first pricing conversation, not discovered at the end of escrow.

The tax applies to the full sale price once you cross the threshold, not just the amount above it. This is a marginal-rate misconception worth clearing up immediately: a building that sells for $5,410,000 does not pay 4% on the $10,000 above the old cutoff. It pays 4% on the entire $5,410,000, which is $216,400. That structure is what makes threshold positioning such a consequential pricing decision.

The New 2026 Thresholds (Effective July 1)

For transactions closing on or after June 30, 2026, Measure ULA's two thresholds move up from $5,300,000 and $10,600,000 to $5,400,000 and $10,900,000. That is a $100,000 increase to the lower threshold and a $300,000 increase to the upper threshold, both driven by the annual CPI adjustment the ordinance requires.

This annual reset matters for any seller whose building sits close to either line. A building priced at $5,350,000 that closed before July 1, 2026 crossed the old $5,300,000 threshold and owed 4% tax on the full price, or $214,000. Under the new $5,400,000 threshold, that same $5,350,000 sale falls below the line entirely, and Measure ULA does not apply at all. The seller keeps that full $214,000 simply because the closing date fell after July 1 instead of before.

The Los Angeles Office of Finance publishes the updated thresholds each year in its Real Property Transfer Tax and Measure ULA FAQ, and the Apartment Association of Greater Los Angeles has tracked the increase in its own member communications. Both confirm the same numbers: $5,400,000 and $10,900,000, effective for closings on or after July 1, 2026.

The mechanism behind the increase is written directly into the ordinance. Measure ULA requires the City of Los Angeles to adjust both thresholds annually using the Chained Consumer Price Index published by the Bureau of Labor Statistics, a measure of inflation that tends to run slightly lower than the standard CPI-U because it accounts for consumers substituting cheaper goods as prices rise. The city applies the percentage change in the index over the prior year to both dollar thresholds and rounds to the nearest $100,000, which is why the increases land on clean numbers like $5,400,000 rather than $5,387,412.

Because the adjustment is formulaic and published in advance, sellers and brokers can generally anticipate the direction of the change well before July 1 even arrives, though the exact final number is not locked until the city publishes its updated FAQ. For a seller weighing whether to push a closing date past the reset, checking the LA Office of Finance page in the weeks leading up to July 1 is the most reliable way to confirm the new number before committing to a timeline.

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Measure ULA Rate Table: What You Owe at Each Price Point

The table below shows the exact Measure ULA rate and dollar amount owed at four illustrative sale prices under the thresholds effective for closings after June 30, 2026. Every figure is calculated on the full sale price, consistent with how the ordinance is written.

Notice the jump from $8,000,000 to $11,000,000. A $3,000,000 increase in sale price does not just add 4% of $3,000,000 in additional tax. It moves the seller into the 5.5% bracket on the entire price, which more than doubles the total ULA bill from that price point alone. For sellers with buildings in the upper range, structuring the timing and even the pricing strategy around the 5.5% threshold deserves the same scrutiny as the 4% threshold.

Worked Example: A $6,000,000 Sale

Take a $6,000,000 apartment building sale that closes after July 1, 2026. Because the sale price falls between the new $5,400,000 and $10,900,000 thresholds, the seller owes 4% of the full $6,000,000 in Measure ULA tax, which is $240,000. That figure is calculated on the entire sale price, not on the $600,000 that sits above the threshold.

Measure ULA is separate from and in addition to standard documentary transfer tax. The City of Los Angeles charges a base rate of $4.50 per $1,000 of sale price, and LA County adds $1.10 per $1,000 on top of that. On a $6,000,000 sale, standard city and county transfer tax comes to roughly $33,600 (city) plus $6,600 (county), for about $40,200 combined. Add that to the $240,000 Measure ULA bill and the seller's total transfer tax exposure on this deal is approximately $280,200, before commissions, loan payoff, and any other closing costs.

A comparable recent Koreatown and Echo Park-area sale illustrates how close to this line real transactions actually land. Kingside closed 1111 Echo Park Ave for $6,250,000, a price point that sits squarely inside the 4% ULA bracket under the new July 2026 thresholds. A seller at that exact price point would owe $250,000 in Measure ULA alone. This is not a hypothetical number pulled from a spreadsheet; it reflects the kind of sale price Kingside sees regularly in this submarket, which is exactly why threshold modeling has to happen before a list price is set, not after an offer comes in.

It helps to walk through the full net proceeds picture on this same $6,000,000 example, not just the tax line items in isolation. Assume the building carries an existing loan payoff of $2,400,000, a standard 3% commission split between the listing and buyer's brokers ($180,000), and roughly $15,000 in escrow, title, and miscellaneous closing costs. The table below shows how each deduction stacks against the $6,000,000 gross sale price to arrive at estimated net proceeds.

Measure ULA alone accounts for more than half of the seller's total deductions outside of loan payoff and commission on this example. Sellers who only see a $6,000,000 asking price advertised, without a written net proceeds walkthrough, routinely overestimate what they will actually walk away with by $200,000 or more. This is why Kingside builds a net proceeds estimate before a listing agreement is signed, not after an offer is accepted.

Measure ULA vs. Standard City and County Transfer Tax

One of the most common points of confusion among sellers is treating Measure ULA and standard documentary transfer tax as the same line item. They are not. Every property sale in Los Angeles, regardless of price, owes standard transfer tax: $4.50 per $1,000 to the City of Los Angeles and $1.10 per $1,000 to LA County. Measure ULA is an additional tax that only kicks in once the sale price crosses $5,400,000, and it stacks on top of the standard transfer tax rather than replacing it.

The rate difference is significant. Standard combined city and county transfer tax works out to about 0.56% of the sale price. Measure ULA is 4% or 5.5%, roughly seven to ten times higher. A seller who only budgets for standard transfer tax and forgets Measure ULA will be short by hundreds of thousands of dollars at the closing table, which is not a place anyone wants to discover a six-figure gap.

Below is a side-by-side comparison on a $6,000,000 apartment building sale closing after July 1, 2026.

Total transfer tax exposure on this $6,000,000 sale is roughly $273,600, of which Measure ULA is nearly 88%. This is why sellers who conflate the two taxes almost always underestimate their total closing costs. Standard transfer tax is a rounding error compared to Measure ULA once a building crosses the threshold.

Pricing a Building Near the Threshold

Because Measure ULA taxes the full sale price rather than just the amount above the threshold, a building priced just above $5,400,000 can produce a materially worse net outcome than the same building priced just below it. This is the single most important pricing dynamic Measure ULA introduces, and it is different from how marginal tax brackets normally work.

Consider two nearly identical buildings. Building A sells for $5,390,000, which is below the $5,400,000 threshold, so no Measure ULA is owed. Building B sells for $5,450,000, which crosses the threshold, triggering a 4% tax on the entire price: $218,000. Building B sold for $60,000 more but nets $158,000 less after Measure ULA. This is why a broker who does not model threshold positioning into your pricing strategy is not giving you complete guidance.

The annual CPI-driven threshold reset on July 1 also creates a timing lever. A building that would sell for $5,420,000 under this year's threshold, and therefore owe the 4% tax, might sell for the same price next year under a higher threshold and owe nothing, simply because the line moved. Sellers whose buildings sit within roughly $150,000 of either threshold should have an explicit conversation with their broker about whether adjusting the list price, negotiating strategically, or timing the closing date around the July 1 reset makes financial sense for their specific situation.

None of this means artificially underpricing a building to dodge the tax is the right move in every case. Sometimes the buyer pool at a slightly higher price point produces a better net outcome even after Measure ULA. The point is that this decision should be made with the full math in front of you, not discovered after you have already accepted an offer.

There is also a negotiation dynamic worth understanding on both sides of a threshold-adjacent deal. Buyers who are underwriting a purchase in the $5,300,000 to $5,600,000 range are almost always aware that a seller's net proceeds swing significantly depending on which side of $5,400,000 the final price lands. A buyer who offers $5,420,000 knows that offer costs the seller roughly $216,800 in Measure ULA the seller would not otherwise owe at $5,390,000. Sophisticated buyers sometimes use this to negotiate a lower price, arguing that the seller's after-tax outcome is what matters, not the headline number. Sellers who walk into that conversation without their own net proceeds math already prepared are negotiating from a weaker position.

The same logic applies in reverse near the $10,900,000 upper threshold, where the swing in Measure ULA between a 4% and 5.5% outcome is large enough to reshape how a seller thinks about accepting or countering an offer that sits just above the line versus one that sits comfortably below it.

How Measure ULA Interacts with 1031 Exchanges

Measure ULA applies regardless of whether the seller is completing a 1031 exchange. The tax is owed on the sale of the relinquished property, and it is paid out of sale proceeds at close, before those proceeds ever reach the qualified intermediary's exchange account. This matters because it reduces the equity available for reinvestment into replacement property.

A seller planning a 1031 exchange on a $7,000,000 Los Angeles apartment building needs to account for the $280,000 Measure ULA payment as a reduction to exchange equity, on top of the standard requirement to reinvest the full net sale proceeds and match or exceed the debt on the relinquished property. Underestimating available exchange equity by a quarter million dollars can be the difference between fully deferring gain and creating an unintended boot situation that triggers partial taxation.

Kingside advises LA apartment owners structuring 1031 exchanges around Measure ULA, the 45-day identification window, and California FTB clawback rules that apply if the replacement property is located outside California. Any exchange plan built on a Los Angeles relinquished property above $5,400,000 has to model Measure ULA into the exchange equity calculation from the outset, not adjust for it after escrow closes.

The interaction gets more complicated when a seller is also weighing whether to exchange into a replacement property outside Los Angeles, or outside California entirely. If the replacement property sits in a different city or state, Measure ULA still applies to the relinquished LA property but has no bearing on the replacement acquisition. The seller's exchange equity is still reduced by the ULA payment made on the sale side, regardless of where the money is eventually reinvested. And if the replacement property is outside California, the seller takes on an additional obligation: filing California Franchise Tax Board Form 3840 annually to track the deferred gain, since California retains the right to tax that gain whenever the replacement property is eventually sold, even if the seller has since become a resident of another state.

None of this changes the Measure ULA calculation itself. It simply means a seller planning a 1031 exchange on a Los Angeles apartment building above $5,400,000 is managing two separate compliance tracks at once: the ULA payment due at close of the relinquished property sale, and the exchange mechanics governing the replacement property. Sellers who bring both tracks to their broker and qualified intermediary at the same time, rather than sequentially, avoid the most common exchange planning mistakes.

How Sellers Structure Around Measure ULA

There is no legal way to avoid Measure ULA on a qualifying sale within City of Los Angeles boundaries once the price crosses the threshold. What sellers can control is timing, pricing strategy, and, in some cases, deal structure. A few approaches Kingside sees regularly among sellers who are deliberate about managing their ULA exposure:

What does not work is pretending the tax does not apply, or discovering it for the first time when escrow sends a preliminary closing statement. Every one of these strategies depends on knowing your building's likely sale price and ULA exposure well before you accept an offer.

Frequently Asked Questions

Andres Diaz

Managing Director, Multifamily Investments • CA DRE #01956479

Andres Diaz has closed 169 multifamily transactions totaling $336.5M and 1,700+ units across LA County. He advises LA apartment owners structuring 1031 exchanges around Measure ULA, the 45-day identification window, and California FTB clawback rules, and models Measure ULA exposure into every net proceeds estimate before a building goes to market.

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