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1. Faq
2. Real Residential Or Commercial Property Transfer Tax And Measure ULA FAQ
   
   Real Residential Or Commercial Property Transfer Tax and Measure ULA FAQ
   
   Sales Price Calculate tax
   
   Tax Due
   
   Effective for transactions closing after June 30, 2025, the new thresholds for ULA will be $5,300,000 and $10,600,000. Transactions above $5,300,000 however under $10,600,000 will be examined a 4% tax and deals $10,600,000 and up will be evaluated a 5.5% tax.
   
   - Link to United to House LA (ULA) Dashboard (Los Angeles Housing Department).
   - Link to Source Data
   virtadpt.net
   
   How typically is the City's real residential or commercial property transfer tax used?
   
   The City's genuine residential or commercial property transfer tax is applicable on all documents that convey real residential or commercial property within the City, unlike residential or commercial property taxes which take place every year. The real residential or commercial property transfer tax is an excise tax on the privilege of offering a genuine residential or commercial property interest, not a tax on the residential or commercial property itself, and is calculated on the factor to consider or worth of the genuine residential or commercial property interest communicated.
   
   Does the City enforce a real residential or commercial property transfer tax besides the special tax enforced under Measure ULA?
   
   Yes, the City enforces a real residential or commercial property transfer tax on all documents that convey real residential or commercial property within the City. The present tax (" Base Tax") is computed based upon the factor to consider or worth of the genuine residential or commercial property interest communicated at a rate of 0.45%. The unique tax under Measure ULA (" ULA Tax") enforces an additional tax on top of the Base Tax.
   
   What is Measure ULA and how does it work?
   
   Measure ULA established the ULA Tax to money affordable housing projects and provide resources to tenants at danger of homelessness. The ULA Tax is enforced on all documents that convey genuine residential or commercial property within the City of Los Angeles when the consideration or value of the real residential or commercial property interest communicated goes beyond a threshold of 5 million dollars, or is ten million dollars or greater, respectively.
   
   What are the rate parts of the Base Tax and the ULA Tax under the City's genuine residential or commercial property transfer tax?
   
   The rate elements are as follows:
   
   - The Base Tax rate of $2.25 per $500 or part thereof (" Base Rate").
   - The ULA Tax rates of, 1) 4% for residential or commercial properties conveyed over $5,150,000, however under $10,300,000 and 2) 5.5% for residential or commercial properties conveyed at $10,300,000 or more (" ULA Rates").
   - The particular language for the brand-new rates can be found here: https://clkrep.lacity.org/onlinedocs/2022/22-1100-S2_ord_187692_1-1-23.pdf.
   - The chart below is summary of the rates:.
   
3. Note: the City's Base Rate is $2.25 for every $500 or fractional part thereof. A transfer in which the worth of the residential or commercial property communicated is not divisible by $500 will be rounded up to the nearby $500 for the calculation of the Base Tax. This does not use to the ULA Rate calculations, which are percentage-based.
   
   When did the ULA Tax go into impact?
   
   The ULA Tax applies to certified conveyances of real residential or commercial property interests that happen on or after April 1, 2023.
   
   How will the City use the April 1 efficient date of the ULA Tax?
   
   The City's procedure for using the ULA Tax is modeled on the ownership change guidelines under California Board of Equalization residential or commercial property tax rule 462.260 for all files based on the City's genuine residential or commercial property transfer tax. If a change of ownership took place before April 1 but is gotten by the county for taping on or after April 1, 2023, the taxpayer will require to provide proof of the actual transaction date to reveal that it in fact took place before the April 1, 2023 reliable date of the ULA Tax.
   
   Will the value limits under the ULA Tax be changed annually?
   
   Consistent with the Measure ULA, the value thresholds of when to apply the ULA Tax and its matching rates are adjusted each year based on the Bureau of Labor Statistics Chained Consumer Price Index.
   
   How will the City's genuine residential or commercial property transfer tax be applied to residential or commercial properties that are situated partially within the borders of the City?
   
   The genuine residential or commercial property transfer tax will be used in proportion to the value of the real residential or commercial property interest that was transferred within the boundaries of the City. If an appraisal of the real residential or commercial property interest isn't readily available, the real residential or commercial property transfer tax should be used based on the square footage of the residential or commercial property within the boundaries of the City, as a proportion of the total factor to consider or worth of the real residential or commercial property interest conveyed.
   
   How will the City deal with over payments or under payments of the real residential or commercial property transfer tax?
   
   If the City, through its compliance process, determines a potential over payment or under payment, the City will inform the parties to the transaction of the prospective overpayment or underpayment. In cases of overpayment, taxpayers will require to file an ask for refund from the Office of Finance. The Claim for Refund Application can be discovered here:
   
   https://finance.lacity.gov/sites/g/files/wph1721/files/2021-04/refundclaim%20%281%29.pdf
   
   In case of underpayment, the taxpayer will receive an invoice for the unsettled balance.
   
   Are there any exemptions for the ULA Tax?
   
   Yes, Measure ULA does provide exemptions for the ULA Tax. The ULA Tax will be not apply on documents that convey genuine residential or commercial property within the City of Los Angeles if the transferee is described under freshly included areas 21.9.14 and 21.9.15 of the Los Angeles Municipal Code (" LAMC"). The transferee descriptions are as follows:
   
   Qualified Affordable Housing Organizations under LAMC Section 21.9.14
   
   - A non-profit entity within Internal Revenue Code section 501( c)( 3) with a history of inexpensive housing advancement and/or affordable housing residential or commercial property management experience.
   - A Community Land Trust, or Limited-Equity Housing Cooperative that has a history of economical housing advancement and/or budget friendly housing residential or commercial property management experience.
   - A restricted partnership or limited liability company where an acknowledged 501( c)( 3) nonprofit corporation, community land trust, or limited-equity housing cooperative is a basic partner or handling member and such 501( c)( 3) nonprofit corporation, neighborhood land trust, or limited-equity housing cooperative has a history of affordable housing advancement and/or economical housing residential or commercial property management experience, or such minimal partnership or limited liability business includes a partner or member, respectively, that has a history of economical housing advancement and/or economical housing residential or commercial property management experience.
   - A neighborhood land trust or limited-equity housing cooperative partnering with a skilled non-profit company.
   - A community land trust or limited-equity housing cooperative that does not demonstrate a history of cost effective housing development and/ or inexpensive housing residential or commercial property management experience which records a cost covenant, consistent with section 22.618.3( d)( 1 )( i). b. of the Los Angeles Administrative Code, on the residential or commercial property at the time of the acquisition.
   The Los Angeles Housing Department administers demands for ULA tax exemptions under LAMC Section 21.9.14.
   
   Other Exemptions under LAMC Section 21.9.15
   
   - A recognized 501( c)( 3) entity which got its initial IRS decision letter classification letter at least 10 years prior to the deal and has assets of less than $1 billion.
   - The United States or any agency or instrumentality thereof, any state or area, or political subdivision thereof, or any other federal, state or regional public agency or public entity.
   - Any entity or agency exempt from the City's taxation power under the California or U.S. Constitutions.
   - All other transactions which are exempt from the base Real Residential or commercial property Transfer Tax per regional, state, or federal laws and policies.
   The Office of Finance administers requests for ULA tax exemptions under LAMC Section 21.9.15. To ask for a decision of an entity's exemption from the ULA under 21.9.15( a), please send the following files and information to finance.ula@lacity.org.
   
   - Power of Attorney.
   - Legal name.
   - Mailing address.
   - IRS 501 (c)( 3) determination letter showing the effective date of the exemption status.
   - Latest Form 990 or newest audited monetary declarations.
   Once the appropriate documentation has been provided and a determination of exemption has been made, the Office of Finance will provide a letter certifying that transactions where the entity is the buyer/transferee are exempt from the tax. The letter benefits one year from the date of the letter.
   
   If a deal has actually currently happened and the tax was paid, however the purchaser consequently believes it qualifies for an exemption, they will need to file a refund claim using the form kept in mind above.
   
   Is the exact same procedure used to figure out the Base Tax and the ULA Tax?
   
   For the Base Tax, it is determined based upon net worth of the residential or commercial property communicated (unique of the value of any lien or encumbrance staying thereon at the time of sale.) For the ULA Tax, it is calculated based on gross value (consisting of the worth of any lien or encumbrance staying thereon at the time of sale.)
   
   If the purchaser is presuming the seller's loan, is the assumed loan quantity excluded from the value of the residential or commercial property communicated?
   
   For the Base Tax, it is computed based upon net worth (special of the presumed loan amount.) For the ULA Tax, it is calculated based on gross worth (including the assumed loan .)
   
   If you have any questions concerning the ULA Tax, please contact finance.ula@lacity.org or (213) 635-7277.
   
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