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Los Angeles Mayor Karen Bass is weighing a temporary suspension of Measure ULA, commonly known as the “mansion tax”, to aid residents recovering from recent wildfires in the Pacific Palisades. The proposal follows concerns over the tax’s impact on the real estate market and its revenue shortfall compared to initial projections.
What is Measure ULA?
Approved by voters in 2022 and enacted in April 2023, Measure ULA imposes:
- 4% tax on property sales above $5.15 million
- 5.5% tax on sales above $10.3 million
These thresholds will rise slightly in June 2025 due to inflation adjustments.
Legal & Economic Implications
Mayor Bass acknowledged uncertainty about whether the tax suspension would require voter approval or could be enacted through city council and mayoral action. Legal teams are reviewing the matter.
Despite raising nearly $600 million in its first year, Measure ULA has been criticized for falling short of revenue projections and contributing to a 40% decline in commercial property sales by the third quarter of 2024. The Los Angeles City Council allocated $168 million in ULA funds for 2024-25, primarily for affordable housing and renter support.
The mansion tax remains a contentious issue, balancing efforts to fund homelessness programs against concerns over its economic impact. The potential suspension would mark a significant shift in LA’s real estate tax policy.
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