I've closed over $488 million in LA multifamily deals, and here's what I can tell you: Measure ULA changed the entire game for apartment sellers in this city. When it passed in November 2022 and took effect in April 2023, I watched deal structures shift overnight. Sellers started calling with different questions. Buyers adjusted their offers. And honestly, a lot of people still don't fully understand how this tax actually hits their bottom line.
Measure ULA is LA's transfer tax on high-value real estate sales. City officials called it the "mansion tax," but apartment building owners know it hits way more than just mansions. It's a progressive tax that applies to properties with recorded sales prices above $5.3 million.
Here's the structure:
That's on top of LA County's existing 1.17% transfer tax. So when you're selling a $12 million apartment building, you're looking at roughly 7% in total transfer taxes before you even think about capital gains or broker commissions.
Example 1: A 12-unit in Los Feliz sells for $8.5 million. Measure ULA at 4% means $340,000. Before Measure ULA, you'd have paid roughly $100,000 in total transfer taxes. That's a $240,000 difference on a single transaction.
Example 2: A 20-unit portfolio in Mid-Wilshire at $22 million. Measure ULA at 5.5% is $1.21 million. Add county tax and you're north of $1.4 million. Sellers in that range feel it hard.
Example 3: A 6-unit in Silver Lake selling for $4.8 million. Measure ULA doesn't apply. But the second that price ticks to $5.3 million, the tax kicks in. I've literally watched negotiations stop because staying at $5.29 million saved $40,000 on transfer tax alone.
This is the part that keeps apartment sellers up at night. A 1031 exchange lets you defer capital gains tax by reinvesting the proceeds. But Measure ULA reduces the cash you have available to reinvest.
Real scenario from last year: My client owned a 16-unit in Silver Lake purchased in 1998. We sold for $18 million. But Measure ULA took $990,000 off the proceeds he could reinvest. Instead of buying an $18 million replacement, his available equity dropped to roughly $17 million after taxes and closing costs. That $1 million difference forces you to buy smaller, bridge with debt, or compromise on quality.
Timing sales before major cap ex: If you're planning $500K in roof work or renovations, some sellers accelerate sales before the major expense. Deferring needed capital expenditure to make the math work creates different problems, but it's a legitimate calculation.
Entity transfers and fractional sales: Tricky and you absolutely need a tax attorney. Some sellers explore selling partial interests or using entity structures to split transactions. IRS scrutiny is real, and it only works in specific situations.
Property splits: A few clients with larger portfolios on single parcels explored splitting into multiple legal parcels to keep individual sales below thresholds. Subdivision costs are real, but it's saved some sellers significant money on 20+ unit properties.
Just eating it and selling anyway: The most common move. Market conditions, interest rates, personal circumstances, and opportunity costs for holding sometimes outweigh the Measure ULA pain. You calculate it into expected returns and move forward.
West LA, Santa Monica, Brentwood: almost everything above 30 units crosses $10 million, meaning 5.5%. Mid-Wilshire, Los Feliz, Silver Lake: typically the 4% bracket. Outlying areas: many properties stay below the threshold entirely.
Portfolio deals get hit differently. A $30 million bulk sale of 60 units across multiple addresses? That's all one transaction at 5.5% across the entire portfolio.
Some buyers are explicitly asking for price reductions to account for Measure ULA. Others are structuring offers with assumption of tax responsibilities. A few walk away from deals in the $9-11 million range because the difference between 4% and 5.5% changes their acquisition cost significantly.
Institutional buyers build Measure ULA into their underwriting models. Individual investors? Many still don't account for it until the title company brings it up. Measure ULA has functionally created a higher effective cap on many apartment deals.
Measure ULA has faced legal challenges, but as of early 2026, it's still firmly in place. There's been talk about potential exemptions or bracket adjustments, but nothing has materialized legislatively. I'm not betting my transaction timeline on changes. Neither should you.
If you own apartment buildings in LA and you're thinking about selling in the next 2-3 years: calculate the actual Measure ULA impact on your specific property at your expected sale price. Model your proceeds after that tax. Figure out what it means for your 1031 exchange and reinvestment options.
Then talk to a broker who's actually closed deals post-Measure ULA. Not theoretical advice—real data on how pricing has shifted. Measure ULA is real and significant, but it's not a deal-killer for the right property. I've closed plenty of strong transactions since April 2023. They just require clearer math and better planning upfront.
If you want to talk through the real numbers on your building, reach out at (916) 996-4421 or taylor@thegroupcre.com.
If your recorded sales price is $5M or more, yes. It's 4% on sales from $5-10M and 5.5% on anything over $10M, on top of California's standard transfer taxes. Check your expected sale price to calculate the impact on your net proceeds.
Measure ULA reduces the cash available to reinvest in your replacement property. On an $18M sale, the tax costs roughly $990K that won't be available for your 1031 target, forcing you to either buy smaller, bridge with debt, or compromise on property quality.
