LA’s Mansion Tax Raises $1 Billion—These Neighborhoods Are Paying Too Much

The “big house tax”—officially known as Los Angeles’ Measure ULA transfer tax—is approaching its third year and has generated more than $1 billion in city revenue.

The policy adds a 4% tax on all property sales of $5.3 million to $10.6 million and a 5.5% sales price above $10.6 million. That tax is on top of the 0.45% Los Angeles tax already charged on all real estate transactions. Both taxes are usually paid by the seller.

The levy raised $1,032,880,148.93 through December 2025, according to the Los Angeles Department of Housing’s online tracker.

“That’s a lot of money being taken out of the pocket of homeowners and a big hit to the real estate market,” he said. Joel Bernerchief economist at Realtor.com®.

The transfer tax generated about $307 million in the last six months.

Communities most affected by the estate tax

Ritzy Westside properties in Los Angeles accounted for more than half of all real estate sales.

The city’s 5th Assembly District, which includes exclusive communities such as Bel-Air and Beverly Crest, contributed $253 million through 366 sales. The 11th Council District, which includes Brentwood and fire-ravaged Pacific Palisades, contributed $261 million with 404 sales.

Mayor of Los Angeles Karen Bass requested City Council approval for an ordinance granting a one-time, three-year exemption from the real estate transfer tax in Measure ULA to homeowners affected by the January 2025 Palisades fire. It passed the first vote, but must continue for consideration by the full City Council.

Meanwhile, on the east side, Council District 4, which includes the Silver Lake and Los Feliz areas, brought in $132 million with 253 sales.

“For a $10,700,000 sale, ULA alone spends about $588,500 before you add in city transfer tax, escrow, advice, lenders’ fees, broker’s fees, and carrying fees, making most deals on the market not a ‘deal,'” CPA and attorney. Chad Cummings of Cummings and Cummings Law tells Realtor.com.

Several of the wealthiest areas in the region, such as Beverly Hills, Malibu, and Calabasas, fall outside the Los Angeles city limits and are not subject to the tax.

Where the money goes

In the summer of 2025, Los Angeles approved a $425 million spending plan using Measure ULA funds, following a previous allocation of $150 million.

Revenue from Measure ULA currently supports 11 programs focused on tenant education and assistance, eviction prevention legal services, homeownership efforts, and the development of new affordable housing.

“ULA keeps tenants in the houses,” Joe Donlindirector of United to House LA—the coalition that supported the local November 2022 ballot measure that approved the tax—tells Realtor.com. “It has financed 800 affordable housing units that have been completed or are under construction. It has provided $30 million to help renters.”

Donlin says Measure ULA also prevents evictions of the elderly and people with disabilities, and provides protections against harassment by employers.

Responsiveness to the property tax

Supporters say the transfer tax provides vital funds to fight homelessness in Los Angeles.

“At a time when many Angelenos are struggling with rising rents and economic hardship, Measure ULA is impacting real people’s lives,” said Donlin. “It’s a billion dollar service to the people of Los Angeles, including the homeless and low-income renters. We’re very pleased with what we’ve seen with ULA so far, and it’s just getting started.”

Critics say the tax is excessive, and has encouraged property sales.

“In general, customers are confused and frustrated by the amount imposed by the voting system,” Rick Tyberg of Tyberg Duffy Group at Douglas Elliman in Beverly Hills tells Realtor.com. “Many believe that the funds collected should not be made through the seller’s transfer tax, and their frustration increases when they examine how the income was distributed in the end.”

Los Angeles real estate agent Dear Ameer tells Realtor.com that “it has fueled high sales in Los Angeles and caused a decline in the luxury market. It has made sellers reluctant to sell and buyers more hesitant to buy to some extent. It has also caused people to buy outside of LA where they don’t have real estate taxes, like Orange County.”

But Berner says it’s hard to say whether sales of homes over $5 million in Los Angeles were clearly affected by the measure. “While 2023 was the weakest year for luxury home sales in LA, 2025 was the strongest year since 2021,” he said.

“There is evidence of a cumulative effect, as the share of homes selling for just under $5.3 million has increased significantly. It appears that sellers would rather take a small amount to buy their home than be forced to pay this tax.”

Some believe the mansion tax has hurt real estate development in Los Angeles—as it also applies to multifamily neighborhoods.

“I estimate the most significant impact of the ULA on the real estate market has been the suppression of investment in the development of much-needed multifamily housing,” 2026 President of the Greater Los Angeles Realtors® Association Chris Duff he tells Realtor.com.

“Based on the city’s own findings, the number of units approved for development has dropped to pre-Covid-19 levels. Due to the high cost of real estate in the region, any additional cost to be borne by a developer or housing provider is a barrier to building much-needed housing at a time when we need units on the market more than anything else.”

Berner says homes in California are overpriced and hard to find, and the move will exacerbate the inventory problem if it doesn’t allow sellers to list their properties for fear of paying mansion taxes.

“The best thing this program does is help finance the construction of affordable housing, but it’s unlikely that the impact of that part will make a big difference right now,” explained Berner. “Rents are going down a bit in Los Angeles, but that has more to do with market conditions affecting the rest of the country than it does with Measure ULA.”

Duff adds, “The ULA is inadvertently harming those it claims to help by making rental housing and housing of all kinds scarce and discouraging the construction of new assets that would help naturally stabilize rental rates.”

Legal pushback

Some critics challenged the move in court.

Last month, a California appeals court upheld Measure ULA, rejecting a challenge by the Howard Jarvis Taxpayers Association that the city lacked the authority to approve the tax as drafted.

“The Howard Jarvis Taxpayers Association believes that this tax is illegal and continues to pursue its decision to take decisions of lower courts that, in our view, have upheld it improperly,” Susan Shelleyvice president of corporate communications, tells Realtor.com.