LA Mansion Tax: How Measure ULA Is Skewing Westside Home Prices Near $5.4 Million
In Brentwood, Pacific Palisades and Venice, home sales near the Measure ULA threshold are being recorded for less than buyers actually spend. As of October 2026, not one of 97 MLS sales near the line since the tax took effect closed just over it, while 46% closed within $50,000 under it. Those recorded prices become the comps that appraisers, automated estimates and other sellers rely on, which means values near $5.4 million are being understated.
Here's how it happens, how to read a comp near the line, and what it means if you're selling, buying or just own a home in that range.
What is the LA mansion tax (Measure ULA) and what are the 2026 thresholds?
Measure ULA, often called the LA mansion tax, is a City of Los Angeles transfer tax on property sales above a set price, and it applies to the entire sale price, not just the amount over the line. For sales closing after June 30, 2026, the tax is 4% on sales over $5.4 million and under $10.9 million, and 5.5% at $10.9 million and above, on top of the city's 0.45% base transfer tax. The thresholds started at $5 million and $10 million in April 2023 and adjust every year for inflation, most recently from $5.3 million and $10.6 million.
Because the tax hits the full price, the first dollar over the line is expensive. A $5,400,000 sale owes no ULA, while a $5,400,001 sale owes about $216,000.
ULA applies only inside City of Los Angeles limits. Brentwood, Pacific Palisades and Venice are inside the city. Santa Monica, Beverly Hills and Malibu are separate cities and are not subject to Measure ULA.
Santa Monica is a little different. It has its own mansion tax, Measure GS, which charges 5.6% of the full sale price on homes that sell for $8 million or more. Below $8 million, Santa Monica's transfer tax is 0.6% or less, and the $8 million line doesn't adjust for inflation, so in Santa Monica the number to watch is $8 million, not $5.4 million.
How has Measure ULA changed home sale prices in Brentwood, Pacific Palisades and Venice?
Since ULA took effect, sales near the line have stopped closing just above it and started piling up just below it. We looked at every MLS single-family sale in the last 6 years in Brentwood, Pacific Palisades and Venice from $200,000 under the line to $600,000 over it, measured against the threshold in effect when each home closed.
Before the tax, about 1 in 4 of these homes closed just over where the line sits. Since the tax, none of the 97 did. Nearly half closed within $50,000 under the line, and 13 landed within $1,000 of it.
Those homes didn't get cheaper. In many cases they were recorded cheaper. The buyer paid what the house was worth, and the paperwork shows a different number.
How can a $5.5 million home sell for $5,365,000?
A $5.5 million home can record at $5,365,000 when the buyer pays costs the seller would normally cover and the price drops by the same amount. Every sale has two numbers: the recorded price, and what the buyer actually spent. The gap comes down to who pays which costs.
By custom, Los Angeles sellers pay the buyer's agent and a share of closing costs. None of that is required by law. Shift those costs to the buyer, lower the price to match, and the sale slides under the line.
Illustrative only. Commissions are negotiable. "Seller keeps" is before the listing agent's fee and the base city and county transfer taxes, which apply either way.
The buyer spends about $5.5 million either way, and the seller keeps $222,500 more. But the city, the MLS and Zillow all show $5,365,000, and that's the number the next appraisal and the next seller will use.
How do you read a home comp near the ULA line?
Treat any Westside sale that closed just under the ULA line as a floor, not the true value. Here's how to read the rest.
Sold just under the line? Depending on which costs moved to the buyer, the real value could be 2% to 4% higher than the recorded price.
Check the list price. Five homes in our data were bid over asking and stopped right at the line. One listed at $4,495,000 when the line was $5 million, drew $504,999 in overbids, and closed at $4,999,999. Bidding wars don't end one dollar short of a tax line by accident.
Sold well over the line? That price is real, but the seller kept 4% less. A $5.8 million sale put about $5.57 million in the seller's pocket after ULA alone.
Ask the agents. Who paid the buyer's agent, title and escrow isn't in the public record. It takes a phone call, and it's the only way to know.
What does Measure ULA mean for Westside sellers, buyers and homeowners?
Sellers with a home worth roughly $5.4 million to $5.6 million: Don't discount the price to get under the tax. Restructure the deal instead. Same value, different paperwork, and you keep about 4% more, roughly $220,000 on a $5.5 million home.
Buyers: You can offer a lower price and still be the seller's best offer. Two things to know. Your agent's fee generally comes out of your cash, not your loan. And your property taxes are based on the recorded price, so $135,000 off the price saves roughly $1,500 a year for as long as you own the home.
Homeowners who aren't selling: If your home is worth $5.2 million to $5.7 million, automated estimates and many appraisals are built on these understated comps. Your number is probably low.
Does the same thing happen at the $10.9 million line?
Yes. At $10.9 million the ULA rate jumps to 5.5%, about $600,000. Between July 2025 and June 2026, when that line sat at $10.6 million, two Brentwood and Pacific Palisades homes closed at exactly $10,598,000, $2,000 under it. One of them was first listed at $12,995,000.
Is it legal to restructure a home sale around Measure ULA?
A buyer paying their own agent and closing costs is a negotiated term, and when it's all shown on the closing statement, it's a clean structure. Side payments, inflated furniture sales, or a buyer quietly covering the seller's bills are how people end up owing the tax plus penalties. Have your real estate attorney and escrow officer sign off before you sign anything.
Want to know what homes near you really sold for?
Send us your address. We'll pull the sales near you, call the agents, and show you what those homes actually traded for. Reach the Paul Salazar Group at Compass at 310-853-2643 or through paulsalazargroup.com.
Frequently asked questions
What is the Measure ULA threshold in 2026? For Los Angeles sales closing after June 30, 2026, Measure ULA charges 4% on sales over $5.4 million and under $10.9 million, and 5.5% on sales of $10.9 million or more. The thresholds adjust every July 1 for inflation.
Is Measure ULA charged only on the amount over the threshold? No. Measure ULA is charged on the full sale price. A Los Angeles home that sells for $5,500,000 owes 4% of $5.5 million, or $220,000, not 4% of the $100,000 over the line.
Does Measure ULA apply in Brentwood, Pacific Palisades, Venice, Santa Monica or Beverly Hills? Measure ULA applies in Brentwood, Pacific Palisades and Venice because they are inside the City of Los Angeles. It does not apply in Santa Monica, Beverly Hills or Malibu, which are separate cities. Sanata Monica has Measure GS.
Why are so many Westside homes selling just under $5.4 million? Many Westside homes are recording just under the $5.4 million Measure ULA line because buyers are paying costs sellers usually cover, such as the buyer's agent fee, and the price drops by the same amount. Since ULA, none of 97 MLS sales near the line in Brentwood, Pacific Palisades and Venice closed just over it.
Are home values near $5.4 million in Los Angeles understated? Often, yes. When a Westside sale is restructured to stay under the Measure ULA line, the recorded price can be 2% to 4% below what the buyer actually spent. Automated estimates and appraisals that rely on those sales can read low for homes worth $5.2 million to $5.7 million.
How can I find out what a home near the ULA line actually sold for? The public record doesn't show who paid the buyer's agent or closing costs, so the only way to know is to ask the agents involved. A local agent who tracks these sales can make those calls for you.
How can I find out what a home near the ULA line actually sold for? The public record doesn't show who paid the buyer's agent or closing costs, so the only way to know is to ask the agents involved. A local agent who tracks these sales can make those calls for you.
Does Santa Monica have a mansion tax? Yes. Santa Monica's Measure GS charges 5.6% of the full sale price on homes that sell for $8 million or more. Below $8 million, Santa Monica's transfer tax is 0.6% or less, and unlike Measure ULA, the $8 million threshold does not adjust for inflation.
Data: MLS closed single-family sales, July 2020 to October 1, 2026, measured against the ULA threshold in effect at closing (pre-ULA sales measured against the original $5 million and $10 million lines). Brentwood, Pacific Palisades and Venice, sales from $200,000 under to $600,000 over the first line (125 before ULA, 97 since); Brentwood and Pacific Palisades, $9.8 million to $12.5 million, for the second. The public record does not show how costs were split in any individual sale. This is market analysis, not tax or legal advice.
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