Investors in Los Angeles are following the ongoing dispute over Measure ULA, the city’s high-value property transfer tax. The law took effect on April 1, 2023.
Measure ULA imposes a 4% transfer tax on sales over $5 million and 5.5% on sales over $10 million. These taxes apply to the full sale price, not just profits. For example, a $6 million sale triggers $240,000 in transfer taxes.
The law directs all revenues to housing and homelessness programs. While socially driven, it represents a substantial cost increase for high-value transactions, particularly in the multi-family sector.
The legal challenge focuses on voter authority under the Los Angeles City Charter. Prior court rulings allow special taxes to pass with a simple majority. However, plaintiffs argue that voters cannot enact taxes the City Council itself cannot pass under Proposition 13.
If the challenge succeeds, it could reverse the transfer tax on high-value properties. That would reduce transaction costs for investors and could increase market activity.
A trial court upheld Measure ULA. Appeals were filed, and the case was fully briefed. Oral arguments, originally set for September, were postponed. The court requested supplemental briefing on the two-thirds vote question. Plaintiffs used this opportunity to challenge prior case reasoning.
The appeal is now scheduled for October 16, 2025.
For investors, the outcome of this appeal could directly affect the cost structure of property acquisitions and sales, particularly for multi-million-dollar transactions. Those considering large-scale investments in Los Angeles should monitor developments closely, as a ruling against Measure ULA could reduce transactional friction and improve investment returns in the high-end market.
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