Measure ULA, approved by Los Angeles voters in 2022, imposes a transfer tax on high-value properties to fund low-income housing. Concern is mounting over its impact on sellers, particularly after wildfires, as taxes are levied based on sale price, not profit. This can penalize owners selling depreciated assets while allowing those with significant gains to evade taxation. ULA's steep tax cliffs discourage selling, leading to a significant decline in high-value property transactions, which needs addressing, whether through suspension or reform.
Measure ULA's problems run deeper than its application to mansions; it affects a range of properties over $5 million, including commercial and residential.
The ULA tax design means property owners could incur heavy taxes on losses while those with significant gains could escape without taxing their profits.
Cliffs in the tax structure create perverse incentives, leading to steep declines in high-value property sales as owners opt to hold rather than sell.
Mayor Bass is considering suspending ULA, reflecting concerns that the current structure could penalize those severely affected by disasters like wildfires.
Collection
[
|
...
]