This is a good time to remember that the “Mansion Tax” goes into effect on the first day of April 2023. Read on to learn more about this measure, including some recent news.
What Is the “Mansion Tax,” Exactly?
Measure ULA, also called the “Mansion Tax,” is a ballot measure approved by L.A. voters in November 2022 that adds a tax on all property sales (both residential and commercial) in Los Angeles.
The additional tax is 4% for properties over $5 million and 5.5% for sales over $10 million.
The proceeds obtained through Measure ULA would go towards a variety of initiatives to fight homelessness in Los Angeles, which is one of the highest in the United States.
However, recent reports indicate that the “Mansion Tax” may yield less than expected, with projections being reduced by about 25% for the period that begins on July 1, 2023, and ends on June 30, 2024.
Measure ULA has met some pushback, including a new state ballot initiative that would seek to invalidate it. But the success of such opposition remains uncertain, and Measure ULA is scheduled to go into effect on April 1, 2023, as originally planned.
Choosing the Best Course of Action
If you are a property owner looking to sell, or a buyer interested in closing on a property in Los Angeles on or after April 1, be sure to check with tax and real estate experts to make an informed decision.
The City of Los Angeles has created an official FAQ page for Measure ULA, where some of the most common questions about the “Mansion Tax” are answered.
However, as some have noted, the official FAQ for measure ULA has been updated at least once, an indication of how fluid the situation is. Check the page often to ensure you stay up-to-date with all the most recent developments.
If you have questions about Measure ULA, feel free to contact our experts. We stand ready to help you make sense of the situation and answer all your questions.
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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