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A very significant tax, Measure ULA, was recently passed in Los Angeles. Setting aside for a moment all the flaws with measure, those will be covered in separate video, I want to explain how it works, when it goes into effect and how in some cases you may potentially work around it. So what is it, ULA increases the transfer tax rate by up to 1,200% more than the current transfer tax rate depending on the dollar amount of the real estate transaction. It applies to sales of real property in the City of Los Angeles at 5 Million and above. That means homes, condos, apartment buildings, retail, office, land and industrial. You can see why Mansion Tax which some called it was a complete misnomer. It goes well beyond taxing mansions. For properties that sell for $5,000,000 up to just under $10M, the additional tax is 4% of the sales price. For sales at 10M and above, it is an additional 5.5% tax. It applies whether you make money or lose money on the sale. To give some examples, with a sale of $5M, there will now be an additional 200k in tax. With a 10M sale, the additional tax will be $550k. This tax goes into effect beginning on April 1, 2023. So what can you do about it. If you want to sell in the not too distant future, I suggest getting your home listed now. If you can close before April 1st, you can avoid the tax. If you haven’t sold by then, there are still some options to consider. The sloppily written measure will have people who sell for $4,999,999 avoiding the tax, thereby netting approximately $200,000 more in their sale, than someone who sells at the higher 5M price. If you are close to either the 5M or 10M threshold, you definitely want to sell for just under. This also creates some potential to do creative drafting, such as Buyers paying certain fees rather than a higher sales price or purchasing personal property such as furniture separately to avoid including that in the sales price of the home. Please reach out to discuss your specific situation and follow us on our YouTube channel to learn more about all the flaws with the ULA measure.