If you are still telling sellers the mansion tax kicks in at five million, update your script. The thresholds moved on July 1 and they move every year.
Where the brackets sit right now
For transactions closing after June 30, 2026, inside the City of Los Angeles: under $5.4 million, no ULA tax applies. From $5.4 million up to $10.9 million, an additional 4%. At $10.9 million and above, an additional 5.5%.
That sits on top of the city's base transfer tax of 0.45%, and separately from the county documentary transfer tax. The thresholds adjust annually against the Chained CPI, which is why they will be different numbers next summer and why writing them into a listing presentation template is a mistake.
Two things agents get wrong constantly. First, ULA is a City of Los Angeles ordinance. Santa Monica, Beverly Hills, Culver City and Manhattan Beach have their own transfer tax regimes, and the City of LA boundary wanders in ways that do not match how anybody actually talks about neighborhoods. Verify the jurisdiction on the parcel, not on the vibe. Second, the tax applies to the full value, not the amount above the threshold. A sale at $5,400,001 is a fundamentally different transaction than one at $5,399,000, and if you do not understand that cliff you will misprice something expensive.
Where reform actually stands
The repeal effort is over. A statewide ballot measure that could have significantly curtailed ULA was withdrawn in June 2026, and attention has shifted from killing the tax to reshaping it.
The research has been piling up. A RAND study published in May 2026 found that ULA has raised about $1.2 billion for affordable housing while reducing high-value real estate sales by 31% and deterring more than 9,000 new housing units, with roughly $452 million in forgone revenue to the city and associated agencies through early 2026. RAND also modeled a reform scenario that could generate roughly $823 million in additional municipal revenue over ten years, produce 19,000 units and still preserve about 72% of current ULA revenue.
Separate work from UCLA and USC looking at 338,000 county property sales found apartment, commercial and industrial sales dropped 30% to 50%, because those are the property types most likely to clear $5 million. The "mansion" framing was always a little dishonest. ULA hits a fourplex in Koreatown the same way it hits a house in Brentwood.
What is on the table: a statewide cap on transfer taxes, and a Los Angeles tax-credit program that would dial back ULA rates for qualifying multifamily and mixed-use projects. The city's own Housing Department ran the numbers on four proposed carve-outs and found they could cut annual ULA revenue by up to 35%. Exempting commercial and multifamily built or substantially remodeled in the past fifteen years would cost as much as 29%, around $145 million a year. A narrow carve-out limited to homes destroyed by the fires would cost about 2%, or $8 million.
Nothing has been enacted. Everything is being argued about.
How to actually use this with a seller
Do not editorialize about the politics. Half your clients voted for it.
Do run the number. On a $5.5 million sale inside city limits, the ULA piece alone is $220,000, and that is before base transfer tax, county tax and commission. Put it in the net sheet at the listing appointment, in writing, next to everything else. Sellers who learn about a six-figure line item at the closing table remember who did not mention it.
Do be careful about pricing right at the line. There is a real and legitimate conversation about whether a property that would list at $5.45 million should be priced under the threshold, and there is an illegitimate version of that conversation involving side agreements and allocating value to personal property. One of those is strategy. The other is a problem. Keep it clean and keep your broker in the loop.
And watch this space, because a tax-credit program for multifamily would change development math across the city, and the first agents to understand the new numbers will be the ones who get the calls.
General information only. Transfer tax treatment depends on the specific transaction. Clients should consult their own tax counsel.
