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1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
   
   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   List prices Calculate tax
   
   Tax Due
   
   Effective for transactions closing after June 30, 2025, the brand-new thresholds for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 but under $10,600,000 will be evaluated a 4% tax and deals $10,600,000 and up will be assessed a 5.5% tax.
   
   - Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
   - Link to Source Data
   
   
   How frequently is the City's genuine or commercial property transfer tax used?
   
   The City's genuine residential or commercial property transfer tax is appropriate on all documents that convey real residential or commercial property within the City, unlike residential or commercial property taxes which take place yearly. The real residential or commercial property transfer tax is an excise tax on the opportunity of selling a real residential or commercial property interest, not a tax on the residential or commercial property itself, and is computed on the consideration or worth of the real residential or commercial property interest conveyed.
   
   Does the City enforce a real residential or commercial property transfer tax besides the unique tax imposed under Measure ULA?
   
   Yes, the City enforces a genuine residential or commercial property transfer tax on all files that communicate genuine residential or commercial property within the City. The present tax (" Base Tax") is computed based upon the factor to consider or value of the genuine residential or commercial property interest conveyed at a rate of 0.45%. The unique tax under Measure ULA (" ULA Tax") enforces an additional tax on top of the Base Tax.
   
   What is Measure ULA and how does it work?
   
   Measure ULA developed the ULA Tax to money cost effective housing projects and supply resources to occupants at danger of homelessness. The ULA Tax is imposed on all files that convey genuine residential or commercial property within the City of Los Angeles when the factor to consider or worth of the genuine residential or commercial property interest conveyed goes beyond a limit of five million dollars, or is 10 million dollars or greater, respectively.
   
   What are the rate components of the Base Tax and the ULA Tax under the City's real residential or commercial property transfer tax?
   
   The rate parts are as follows:
   
   - The Base Tax rate of $2.25 per $500 or part thereof (" Base Rate").
   - The ULA Tax rates of, 1) 4% for residential or commercial properties communicated over $5,150,000, but under $10,300,000 and 2) 5.5% for residential or commercial properties communicated at $10,300,000 or more (" ULA Rates").
   - The particular language for the brand-new rates can be found here: https://clkrep.lacity.org/onlinedocs/2022/22-1100-S2_ord_187692_1-1-23.pdf.
   - The chart below is summary of the rates:.
   
3. Note: the City's Base Rate is $2.25 for every $500 or fractional part thereof. A transfer in which the worth of the residential or commercial property communicated is not divisible by $500 will be assembled to the nearest $500 for the estimation of the Base Tax. This does not use to the ULA Rate computations, which are percentage-based.
   
   When did the ULA Tax enter into impact?
   
   The ULA Tax is suitable to qualified conveyances of genuine residential or commercial property interests that occur on or after April 1, 2023.
   
   How will the City use the April 1 effective date of the ULA Tax?
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   The City's procedure for using the ULA Tax is designed on the ownership change guidelines under California Board of Equalization residential or commercial property tax guideline 462.260 for all documents based on the City's genuine residential or commercial property transfer tax. If a change of ownership took place before April 1 however is received by the county for tape-recording on or after April 1, 2023, the taxpayer will require to offer evidence of the real deal date to show that it actually occurred before the April 1, 2023 efficient date of the ULA Tax.
   
   Will the worth limits under the ULA Tax be changed annually?
   
   Consistent with the Measure ULA, the worth thresholds of when to apply the ULA Tax and its matching rates are changed every year based upon the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's genuine residential or commercial property transfer tax be applied to residential or commercial properties that are located partly within the borders of the City?
   
   The genuine residential or commercial property transfer tax will be used in proportion to the worth of the genuine residential or commercial property interest that was transferred within the boundaries of the City. If an appraisal of the real residential or commercial property interest isn't available, the genuine residential or commercial property transfer tax need to be used based on the square video footage of the residential or commercial property within the borders of the City, as a proportion of the total consideration or worth of the real residential or commercial property interest communicated.
   
   How will the City handle over payments or under payments of the genuine residential or commercial property transfer tax?
   
   If the City, through its compliance procedure, recognizes a potential over payment or under payment, the City will notify the parties to the deal of the prospective overpayment or underpayment. In cases of overpayment, taxpayers will require to file a request for refund from the Office of Finance. The Claim for Refund Application can be discovered here:
   
   https://finance.lacity.gov/sites/g/files/wph1721/files/2021-04/refundclaim%20%281%29.pdf
   
   In case of underpayment, the taxpayer will get a billing for the unpaid balance.
   
   Are there any exemptions for the ULA Tax?
   
   Yes, Measure ULA does provide exemptions for the ULA Tax. The ULA Tax will be not be applicable on files that communicate real residential or commercial property within the City of Los Angeles if the transferee is explained under recently included areas 21.9.14 and 21.9.15 of the Los Angeles Municipal Code (" LAMC"). The transferee descriptions are as follows:
   
   Qualified Affordable Housing Organizations under LAMC Section 21.9.14
   
   - A non-profit entity within Internal Revenue Code section 501( c)( 3) with a history of budget-friendly housing development and/or budget friendly housing residential or commercial property management experience.
   - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of affordable housing development and/or budget-friendly housing residential or commercial property management experience.
   - A minimal collaboration or limited liability company where a recognized 501( c)( 3) not-for-profit corporation, neighborhood land trust, or limited-equity housing cooperative is a general partner or handling member and such 501( c)( 3) nonprofit corporation, neighborhood land trust, or limited-equity housing cooperative has a history of inexpensive housing development and/or inexpensive housing residential or commercial property management experience, or such limited partnership or restricted liability business consists of a partner or member, respectively, that has a history of budget friendly housing development and/or inexpensive housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with a skilled non-profit organization.
   - A neighborhood land trust or limited-equity housing cooperative that does not demonstrate a history of budget friendly housing advancement and/ or cost effective housing residential or commercial property management experience which tapes a price covenant, consistent with area 22.618.3( d)( 1 )( i). b. of the Los Angeles Administrative Code, on the residential or commercial property at the time of the acquisition.
   The Los Angeles Housing Department administers ask for ULA tax exemptions under LAMC Section 21.9.14.
   
   Other Exemptions under LAMC Section 21.9.15
   
   - A recognized 501( c)( 3) entity which got its initial IRS decision letter designation letter a minimum of ten years prior to the deal and has assets of less than $1 billion.
   - The United States or any firm or instrumentality thereof, any state or area, or political neighborhood thereof, or any other federal, state or regional public firm or public entity.
   - Any entity or agency exempt from the City's taxation power under the California or U.S. Constitutions.
   - All other deals which are exempt from the base Real Residential or commercial property Transfer Tax per regional, state, or federal laws and policies.
   The Office of Finance administers ask for ULA tax exemptions under LAMC Section 21.9.15. To request a determination of an entity's exemption from the ULA under 21.9.15( a), please send the following documents and information to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) decision letter revealing the reliable date of the exemption status.
   - Newest Form 990 or latest audited financial statements.
   Once the appropriate paperwork has been offered and a decision of exemption has been made, the Office of Finance will supply a letter certifying that deals where the entity is the buyer/transferee are exempt from the tax. The letter benefits one year from the date of the letter.
   
   If a deal has currently occurred and the tax was paid, however the buyer consequently believes it certifies for an exemption, they will require to file a refund claim utilizing the kind kept in mind above.
   
   Is the very same measure utilized to figure out the Base Tax and the ULA Tax?
   
   For the Base Tax, it is calculated based upon net value of the residential or commercial property communicated (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is determined based upon gross value (including the worth of any lien or encumbrance remaining thereon at the time of sale.)
   
   If the buyer is assuming the seller's loan, is the assumed loan amount excluded from the value of the residential or commercial property conveyed?
   
   For the Base Tax, it is determined based upon net value (exclusive of the assumed loan amount.) For the ULA Tax, it is computed based on gross value (consisting of the assumed loan quantity.)
   
   If you have any concerns regarding the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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