Measure ULA is an LA City transfer tax on real estate sales above a specified dollar threshold. It was enacted by LA City voters in November 2022, went into effect April 2023, and has been the subject of subsequent revisions to its thresholds and rates. The tax applies only to sales within LA City limits; sales in adjacent cities (Glendale, Burbank, Pasadena, Culver City, Santa Monica, Beverly Hills) and in LA County unincorporated areas are not subject to Measure ULA. For sellers contemplating a sale of LA City multifamily above the current threshold, Measure ULA is a substantial line item in the cost stack that should be modeled explicitly before pricing strategy is finalized.
Measure ULA imposes an additional transfer tax on qualifying real estate sales within LA City. The tax applies on top of existing LA County and LA City documentary transfer taxes. It is not a capital gains tax. It is owed on the sale price regardless of whether the seller has a gain or a loss. Even a seller selling at a loss owes Measure ULA on a qualifying LA City transaction. It is not reduced by a 1031 exchange. A 1031 defers federal and California capital gains tax but does not exempt the sale from transfer taxes. Measure ULA applies on the sale of the relinquished property even within a 1031 exchange.
Measure ULA is an LA City ordinance. Sales in the following locations are not subject to it:
Glendale, Burbank, Pasadena, South Pasadena, Culver City, Santa Monica, Beverly Hills, West Hollywood, and all other separate cities within LA County. Each of these jurisdictions is outside LA City and outside Measure ULA. LA County unincorporated areas (including Marina del Rey, portions of the San Fernando Valley, and various other unincorporated pockets). The LA County RSTPO applies to rentals in these areas, but Measure ULA does not.
Pricing below the threshold where honestly possible. If the building's market value is marginally above the current threshold, selling at a price just below the threshold can avoid Measure ULA entirely. This only makes sense when the pricing reduction is small relative to the tax savings and when the building could reasonably clear the market at the lower number.
1031 exchange into non-LA-City replacement. A 1031 does not eliminate Measure ULA on the current sale. But if the seller's portfolio strategy includes future sales, rolling proceeds into non-LA-City replacement means those future sales will not be subject to Measure ULA.
Careful transaction timing around ordinance revisions. Measure ULA has been revised since its original enactment. Future revisions are possible. Sellers with flexibility on timing sometimes benefit from tracking the legal and political landscape, though "waiting for repeal" is a weak primary timing strategy.
Specialized structures. Entity-interest sales and specific trust-based structures are occasionally used for specific situations. These require specialized counsel and are narrow tools.
Capital gains tax. Measure ULA is a transfer tax, separate from income tax. The seller still owes federal capital gains, California state capital gains, and depreciation recapture on the gain from the sale, regardless of Measure ULA treatment.
LA County and LA City base transfer taxes. These exist independently of Measure ULA. They are generally small relative to Measure ULA but still apply.
For sellers of LA City multifamily above the current Measure ULA threshold, the tax materially affects net proceeds. An honest pre-listing net-proceeds model that accounts for Measure ULA often produces different strategy conclusions than a model that forgets it. Specifically: the difference between a sale at the current threshold and a sale above the current threshold can be substantial once Measure ULA applies. For buildings sitting near the threshold, this is a non-trivial consideration.
Measure ULA has been subject to legal challenges since its 2023 enactment. The ordinance was upheld in its initial court test. Subsequent revisions to thresholds and rates have occurred. Sellers should verify the specific thresholds, rates, and application currently in effect at the time of any contemplated transaction.
Current (2026) Measure ULA thresholds and rates: verification pending. Any specific dollar figures below should be confirmed against current LA City documentation before transaction decisions.
If you own LA City multifamily and are contemplating a sale, Measure ULA is a variable that belongs in the pre-listing cost model. For sales well above the current threshold, the tax is material. For sales near or below the threshold, small pricing decisions can change whether the tax applies at all. For sales of LA-adjacent multifamily (Burbank, Glendale, Pasadena, Santa Monica, LA County unincorporated), Measure ULA does not apply.
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Does Measure ULA apply to a 1031 exchange?
Yes — Measure ULA applies on the sale of the relinquished property, regardless of whether the proceeds are rolled into a 1031 replacement. The 1031 defers capital gains tax, not the transfer tax.
Does Measure ULA apply to properties outside LA City?
No. Measure ULA is an LA City ordinance. Sales in Glendale, Burbank, Pasadena, Santa Monica, Culver City, West Hollywood, Beverly Hills, and LA County unincorporated are not subject to it.
Who actually pays Measure ULA — buyer or seller?
Legally, the tax is imposed on the transfer itself, typically paid by the buyer at closing. In practice, the economic burden is negotiated as part of the deal structure. Sellers often bear some or all of the cost through negotiated price and allocation.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap. This is informational, not legal or tax advice — consult specialized counsel for specific Measure ULA analysis.
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