Double Taxation Trap in LA for Lenders
April 14, 2023

Measure ULA, also known as the "Mansion Tax", has been introduced to fund affordable housing projects and provide resources to tenants at risk of homelessness in Los Angeles. The ULA rates are shown in the table below:


Transfer Tax


Los Angeles City
  • 4% of the property value $5 million to $10 million (Measure ULA tax)
  • 5.5% of the property value over $10 million (Measure ULA tax)
  • Plus $1.10 per $1,000 Los Angeles County Tax
  • Plus $4.50 per $1,000 other city tax

Culver City
  • 0.45% of the property value up to $1.5 million
  • 1.5% of the property value $1.5 million to $3 million
  • 3% of the property value $3 million to $10 million
  • 4% of the property value over $10 million
  • Plus $1.10 per $1,000 Los Angeles County Tax

San Francisco City
  • 2.25% of the property value $5 million to $10 million
  • 5.5% of the property value $10 million to $25 million
  • 6% of the property value over $25 million

Santa Monica City
  • 5.6% of the property value over $8 million
  • Plus $1.10 per $1,000 Los Angeles County Tax
  • Plus $3.00 per $1,000 on amounts less than $5 million
  • Plus $6.00 per $1,000 on amounts $5 million or more

San Jose City
  • 0.75% of the property value between $2 million and $5 million
  • 1.0% for property valued greater than $5 million and less than $10 million
  • 1.5% for property valued over $10 million
  • Plus $0.55 per $500 Santa Clara County Tax
  • Plus $1.65 per $500 other city tax

Why do Lenders care?

Lenders care because it is possible to be double taxed at exorbitant prices lowering your chance of full restitution while the government takes a windfall.

In Los Angeles, Measure ULA establishes a 4% tax on all real property sales priced or valued at $5 million to no greater than $10 million and a 5.5% tax on real property sales priced or valued at $10 million or greater.

For example, for a transfer that occurred prior to April 1, 2023 where the real estate was valued at $12 million, the transfer tax would have been $67,200. From and after April 1, 2023, the transfer tax for the same real estate conveyance is $727,200—a colossal increase of 1,082%.

How does this apply to foreclosures? The lender forecloses at $12M and pays a $727,200 tax. Then the lender packages and resells the property for $15,000,000 and incurs another $909,000 tax. This can be 1 month or 1 year later, the tax is there.

We recognize this issue. We have consulted with clients who are faced with this issue. Please note we are neither legal nor accounting advisors. Just seasoned real estate professionals. And, we welcome all lenders to contact us to discuss how you might avoid the “double” taxation, or the tax altogether.

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Atlas REO Property Specialists is a commercial real estate team with an emphasis in multifamily, office and retail REO brokerage. Geographically focused in Southern California, Atlas offers an integrated platform of services in valuation, marketing and sales of investment properties.

As multifamily, office and retail specialists, Atlas has over 100 cumulative years of experience spanning through multiple economic cycles. Atlas provides services that includes, but not limited to, property preservation, real estate disposition services with meticulous execution, and Broker’s Opinion of Value (BPO). The firm has successfully represented more than 60 financial institutions in the disposition of their multifamily and retail assets. While Atlas has embedded technology and speed in its operation, integrity and experience are the guiding forces behind every transaction.

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