Measure ULA changes the Los Angeles City transfer tax as follows:
1. The city transfer tax will be 4% on deals greater than $5 million and less than $10 million. 2. The city transfer tax will be 5.5% on deals $10 million or greater. 3. The city transfer tax will be effective on April 1, 2023. 4. This is in addition to the current .45% tax on all city level transactions and the .11% county city transfer tax. 5. Total transfer tax for deals greater than $5 million and less than $10 million is accordingly 4.56%. 6. Total transfer tax for deals $10 million or greater is accordingly 6.06%. 7. For deals $10 million or greater, this city transfer tax will accordingly be 5.95%, literally 54 times the county transfer tax.
To phrase the transfer tax another way, the City and County of Los Angeles will essentially charge all deals $10 million or over a 6.06% commission. This tax is on gross proceeds , not profits.
CURRENT POLITICAL CLIMATE: A WARNING TO ALL CALIFORNIA APARTMENT OWNERS Measure ULA was billed by its proponents as a “mega mansion” tax, with much of the materials supporting such a measure focusing on the single-family homes of the rich and famous contrasting with the suffering of the homeless. While the merits of Measure ULA can be debated, this characterization as a “mega mansion” tax is disingenuous. The measure applies to all asset classes: multifamily, industrial, retail and office. The measure certainly applies to many Los Angeles apartment buildings worth more than $5 million which are providing housing to low- income families. The successful marketing of this measure should serve as a warning shot to all California apartment owners. The same political arguments of taking from the rich to provide to the poor can easily be applied to many other California cities desperate for funds to combat increasing social ills.
THE MEASURE APPLIES TO ALL ASSET CLASSES: MULTIFAMILY, INDUSTRIAL, RETAIL AND OFFICE.
Powered by FlippingBook