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In the luxury enclaves of Bel-Air, Beverly Crest, and the Hollywood Hills, a new number has become the most important figure in any contract: $5,300,000.
Since its implementation, Los Angeles’ Measure ULA—formally known as the Homelessness and Housing Solutions Tax—has functioned as a massive “transaction brake.” In 2026, the stakes are higher than ever. With the city surpassing $1 billion in revenue collected from the Mansion Tax, agents are navigating a fiscal minefield that can cost a seller over half a million dollars in a single afternoon.
The impact of Measure ULA has been surgical and severe. In the first year alone, residential sales over the $5 million mark dropped by nearly 70% compared to the previous year (Getzels Group).
The 2026 Update: As of July 2025, the tax thresholds were adjusted for inflation. Today, the “cliff” begins at $5,300,000.
For a $10.7 million sale, the ULA tax alone totals approximately $588,500 (CalMatters). Because this is a gross transfer tax, it is due even if the seller is losing money on the deal. This has created a “bunching effect” where sellers would rather accept a lower price of $5.29M than pay the tax on a $5.35M sale.
For the Los Angeles agent, the risk isn’t just a dead deal; it’s a Net Sheet Disaster. Most sellers assume taxes are calculated on profit (capital gains). Measure ULA is calculated on the gross sales price, including any assumed debt (Katten).
To keep a sale price below the $5.3M or $10.6M “cliffs,” savvy agents are separating the real estate from the lifestyle assets.
Instead of selling the “fee interest” in a property, some luxury owners are selling interests in the LLC or Partnership that owns the asset.
To avoid the $10.6M cliff (5.5%), an agent might negotiate a sale price of $10.5M with a significant Seller Carry-Back note at a higher-than-market interest rate.
As of January 2026, the LA City Council is voting on a motion to put a “Mansion Tax Reform” on the June 2026 ballot (LAist). The proposed reform would exempt affordable housing and certain multifamily projects from the tax, potentially thawing the frozen development market.
In a market defined by “Mansion Tax” anxiety, the LA realtor is no longer just a salesperson; they are the architect of the deal. By understanding the inflation-adjusted thresholds and employing creative (and legal) structuring, agents are proving their value in an era where a single dollar over the limit can cost a client hundreds of thousands.
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