Here's the New Playbook for Apartment and Commercial Owners in LA.
The ULA Repeal Is Dead
For three years, I've been having some version of the same conversation with apartment building and commercial property owners across Los Angeles: "Should I just hold until the transfer tax goes away?"
As of this week, I can finally give a definitive answer: it's not going away. Stop waiting.
By: Jake Plewa Commercial Real Estate Sales & Valuation, Los Angeles
Two things, and together they close the book on ULA repeal.
First, the statewide effort died. The Howard Jarvis Taxpayers Association had a measure headed for the November ballot — the Local Taxpayer Protection Act — that could have capped city transfer taxes and potentially invalidated Measure ULA entirely. This was the scenario a lot of owners and investors were quietly banking on. Last week, after a deal with the Governor and legislative leaders in Sacramento, the measure was withdrawn. Its replacement, Proposition 43, only makes it harder to pass future taxes like ULA starting in 2027. It doesn't repeal, reduce, or cap the one we already have.
Second — and this one matters most for our side of the business — the multifamily exemption died too. Earlier this month, the LA City Council voted unanimously to shelve a ballot measure that would have exempted newly constructed multifamily and mixed-use projects from ULA for their first ten years. That was the most realistic path to relief for apartment development and disposition, and it's off the table.
So there will be nothing on the November ballot that touches Measure ULA. Not statewide, not locally.
What just happened
People still call ULA the "mansion tax," but that name has always been misleading. It applies to every property type — apartment buildings, retail, office, industrial, land. In practice, income property owners feel it harder than homeowners, because a 16-unit building clears the threshold a lot faster than most houses do.
As of July 1, the inflation-adjusted thresholds are:
- Sell above $5.4 million, and the city takes 4% of the entire sale price.
- Sell above $10.9 million, and it's 5.5%.
And it's a cliff, not a ramp. The tax applies to the whole price, not just the amount over the line. Sell a building at $5,399,999 and you owe nothing. Sell at $5.41 million and you owe roughly $216,000. A $12 million apartment sale hands the city $660,000 — regardless of your basis, your debt, or whether you made a dime on the deal. That last part stings the most: ULA is a tax on gross price, not profit.
Where that leaves you
Since "wait it out" is no longer a strategy, here's what actually is:
Underwrite ULA into every disposition. If your building's realistic value is anywhere near $5.4M or $10.9M, the threshold belongs in the pricing conversation from day one — not something you discover in escrow. Sometimes the right answer is positioning just under a line. Sometimes the market carries you well past it and the tax is simply a cost of the exit. Either way, it should be a deliberate decision, and it directly affects your net and your buyer pool.
Rethink hold-versus-sell math. If you were holding specifically because repeal felt close, that thesis is gone. Now the comparison is honest: today's pricing minus ULA versus years more of operating a building under a 3% RSO cap, rising insurance, and the gas-appliance phaseout coming for your mechanicals. For some owners the answer is still hold. But run it with real numbers, not hope.
Consider structure and timing. Portfolio owners have options single-asset sellers don't — how assets are parceled, whether a sale happens as one transaction or several, and how a 1031 exchange timeline interacts with the tax. This is where your CPA and real estate attorney earn their fees, and where getting the team together before listing pays off.
Buyers: this is your leverage, use it. ULA shapes seller behavior. Expect motivated pricing just under $5.4M, and understand that a seller at $5.6M is netting meaningfully less than the price suggests — which affects how they negotiate. Sophisticated buyers are already building this into offers.
Developers: the exemption isn't coming. New multifamily projects will pay ULA on exit like everything else. That has to be in your pro forma now, because the ten-year carve-out that would have changed the math is officially dead.
The new playbook
I'm not here to argue whether ULA is good policy — the debate about its effect on housing production and transaction volume is real, and it will continue. What I can tell you is that hoping it disappears is no longer a plan. The owners who come out ahead from here will treat ULA as a fixed cost of doing business in LA and get strategic about everything around it: pricing, timing, structure, and exit.
If you own an apartment building or commercial asset anywhere near these thresholds and want to see what the numbers look like for your specific property, reach out. This is exactly the math worth running before you list — not after.
The bottom line
With the ULA repeal off the table, the real opportunity now lies in strategic pricing, timing, and structure — not waiting. Contact me for a confidential review of your property so we can run the numbers and map out the smartest path forward before you list.
Jake Plewa
NOTE: The information provided on this website and this post is for general informational purposes only and is not intended as financial, tax, legal, or real estate advice. We are not licensed accountants, attorneys, estate planners, or real estate appraisers. All valuations, market analysis, and content are provided as educational information only. Any financial, tax, legal, or real estate decisions should be made in consultation with qualified professionals such as a licensed real estate appraiser, accountant, attorney, or financial advisor. Results and outcomes will vary based on individual circumstances.Keywords: Measure ULA repeal, Los Angeles Mansion Tax, Real estate taxes, Los Angeles Multifamily Real Estate, Howard Jarvis Taxpayers Association, Local Taxpayer Protection Act, November Ballot 2026.