Measure ULA, (also known as the “Mansion Tax”), a provision that imposes a new tax on the sale or transfer of real estate property in Los Angeles, is getting pushback from real estate and anti-tax groups.
L.A.’s “Mansion Tax” Is Challenged in Court
A coalition of real estate and anti-tax groups has challenged the recently passed Measure ULA in court.
The measure slated to go into effect on April 1, 2023, would impose a new tax on sales or transfers of property in Los Angeles with the aim of alleviating the city’s housing crisis.
Although many know Measure ULA as the “Mansion Tax,” its effects would impact all types of properties, including offices, multifamily and industrial assets.
Under the new measure, Los Angeles’ transfer tax would see an addition to the current 0.45% equal to 4% for properties valued between $5 and $10 million, and 5.5% for properties valued at $10 million or more.
The Legal Challenge
58% of L.A. voters approved measure ULA in the November election. However, the new tax also has its detractors.
A lawsuit filed on December 21 by the Howard Jarvis Taxpayer Association and the Apartment Association of Greater Los Angeles argues that ULA measure is unconstitutional and claims that “Great and irreparable harm will result to plaintiffs, and to all Los Angeles property owners in being required to pay unconstitutionally imposed taxes.”
Since the success of the legal challenge to Measure ULA is far from guaranteed, property owners planning the sale of Los Angeles assets in the short term should seek the assistance of a commercial real estate professional to guide their decision-making.
Update: The City of Los Angeles has released an official FAQ for measure ULA. Please refer to it for answers to common questions and updates.
Disclaimer: This material is for general information and educational purposes only. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions
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