California new law – Measure ULA, referred to as the “Manson Tax”
Measure ULA becomes Law on January 1, 2023
Applies to Property Sales on or after April 1, 2023 — in the City of Los Angeles
Property Sale for $5 million to $10 million pay additional transfer tax of 4%
Property Sale for > $10 million pay an additional transfer tax of 5.5%
It is broad in scope since it applies to all real property asset classes, including residential and commercial properties as well as vacant land.
The value of the property for purposes of the measure will include the value of any lien or encumbrance remaining on the property when it is sold so that the tax is on the gross value, not just the consideration received. Moreover, the tax would be due regardless of whether it is being sold at a gain or a loss. The thresholds under the measure will be adjusted each year for inflation.
Exemptions
Measure ULA Transfer Tax Does NOT apply to transfer of real estate with specific tax exemptions.
EX: Measure ULA does not apply to 1031 Exchanges
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