Measure ULA 2026 Update: New LA Mansion Tax Thresholds, Repeal News & Selling Strategies
The fight over Los Angeles' mansion tax is effectively over, and the tax won. Every serious repeal and reform effort, two City Council ballot proposals and a statewide initiative, died in the first half of 2026, and the next realistic ballot fight isn't until 2028. If you own a home worth $5.4 million or more in the City of Los Angeles, your playbook just got clearer, and more important.
I'm Paul Salazar with the Paul Salazar Group at Compass. Here's what happened, what the new thresholds mean, and how sellers near the tax line should be planning right now.
Was Measure ULA Repealed in 2026? Here’s What Happened With LA’s Mansion Tax
Three developments landed in quick succession this year:
January 2026: The City Council rejected a proposal to put a ULA rewrite on the June 2026 ballot. That rewrite would have exempted new construction and households affected by the Palisades and Eaton fires.
June 2026: The council voted 14-0 to shelve a second reform measure, on the final day proposals could be sent to November voters.
The statewide compromise: The biggest threat of all, a statewide initiative that would have sunset ULA entirely within two years, was withdrawn after Sacramento lawmakers struck a deal. The November ballot measure that emerged only restricts future local taxes. Existing taxes like ULA are untouched.
The debate will continue. The tax will not change. The next realistic ballot opportunity is 2028.
The New ULA Thresholds for 2026–2027
The annual inflation adjustment kicked in for transactions closing after June 30, 2026:
4% tax applies from $5.4 million to $10.9 million (up from $5.3M–$10.6M)
5.5% tax applies at $10.9 million and above (up from $10.6M)
The threshold move matters more at the top than the bottom. Going from $5.3M to $5.4M on the lower tier isn't a meaningful shift. But $10.6M to $10.9M is a real jump, that's $300,000 of additional room before the 5.5% rate kicks in, and it genuinely helps sellers and buyers transacting in that range.
The Numbers Behind the Debate
ULA crossed $1 billion in total revenue in January 2026, funding affordable housing and tenant protections. But the market cost has been real. UCLA research estimates the odds of a property selling above the $5 million threshold fell by as much as 55%. UCLA and RAND researchers estimate roughly 1,900 fewer apartment units delivered annually. And a separate study out of Harvard, UC Irvine, and UC San Diego found the sales slowdown reduced property tax collections enough to offset an estimated 63% of ULA's revenue.
Whatever your view of the policy, the market has priced it in, and now the rules are stable enough to plan around.
How Does Measure ULA Affect Developers and Luxury Home Values in Los Angeles?
Every time this threshold climbs, development properties gain value. Teardowns and lots that developers buy, build on, and resell into the $5M range now carry more margin, because the finished product has more room under the tax line. If you own one of those properties on the Westside, the threshold increase just added to your value, without you doing anything.
How Deals Are Adapting Near the Threshold
On homes sitting near the tax line, we're watching deal structures adapt in real time. The most common move: buyers picking up closing costs to bring the sales price down and keep the transaction under the line, so the seller never triggers ULA. It's a straightforward restructure that can be worth six figures to the seller, and it only works if it's negotiated deliberately from the start.
Overall, the thresholds moving up is good news for this market.
Paul Salazar's Take: What to Do With This
If your home's value sits anywhere near $5.4M or $10.9M, get a pricing strategy conversation on the calendar before you list, not after. The difference between landing just under a threshold versus just over it can be the largest single line item on your closing statement, on a home at the $10.9M line, crossing it costs an extra 1.5% on the entire sale price. That's entirely plannable, and almost nobody plans for it.
ULA isn't going anywhere before 2028 at the earliest. The sellers who win in this environment aren't the ones waiting for repeal. They're the ones who price, structure, and time their sale around a tax that's now a fixed feature of the landscape. If you want to know more about how can this affect your property, feel free to reach out to me anytime at info@paulsalazargroup.com.
Measure ULA FAQ - 2026
What is the LA mansion tax threshold in 2026? For transactions closing after June 30, 2026, the 4% tax applies to sales from $5.4 million to $10.9 million, and 5.5% applies at $10.9 million and above. Thresholds adjust annually for inflation.
Was Measure ULA repealed? No. Two City Council reform proposals were rejected or shelved in 2026, and the statewide initiative that would have ended ULA was withdrawn. The compromise measure on the November 2026 ballot only restricts future local taxes, ULA stays in place.
Who pays the ULA tax, buyer or seller? The seller pays ULA. It applies to the full sale price, not just the amount above the threshold, which is why crossing the line by even one dollar is expensive.
Can you avoid the mansion tax legally? You can't avoid it on a qualifying sale, but deals near the threshold are commonly structured so the recorded sales price lands under the line, for example, buyers covering closing costs in exchange for a lower purchase price. This should be planned with your agent before listing.
Does ULA apply outside the City of Los Angeles? No. ULA applies only within City of Los Angeles limits. Westside neighborhoods like Venice, Mar Vista, Brentwood, and Pacific Palisades are in the city; Santa Monica, Culver City, and Beverly Hills have their own transfer tax rules.
