Understanding seller net proceeds on an LA apartment sale.
Price is the number everybody negotiates. Net is the number that hits your account. On a Los Angeles apartment building those two can sit six percent apart before you have paid a single broker, and almost all of that gap is one line item most owners underestimate.
Measure ULA is a cliff, not a bracket.
This is where LA sellers get hurt, and the mechanism is worth understanding precisely.
Measure ULA — the City's Homelessness and Housing Solutions Tax — applies on top of the ordinary transfer tax when a City of Los Angeles property sells above a threshold. For transactions closing on or after July 1, 2026 the thresholds are $5,400,000 and $10,900,000.
- Up to $5,400,000: no ULA.
- Over $5,400,000 and under $10,900,000: 4%.
- $10,900,000 or more: 5.5%.
City of LA Office of Finance, Real Property Transfer Tax and Measure ULA FAQ; LA County Registrar-Recorder, Documentary Transfer Taxes ("Los Angeles (Effective 7/1/26)"). Thresholds adjust annually with the Chained CPI under LAMC § 21.9.2(c). Verified 24 August 2026.
It applies to the whole price, not the amount above the line.
Read the ordinance language: a tax "at the rate of 4% of the consideration or value." Not 4% of the excess. The entire price. So a building that trades at $5,400,000 owes zero ULA, and a building that trades at $5,450,000 owes $218,000. Fifty thousand dollars of extra price costs you $218,000 in tax.
Here is what that actually means when you are negotiating. Right below each threshold there is a dead zone where more price makes you less money. On the 4% tier that zone runs from $5,400,001 up to roughly $5,625,000 — anywhere in there, you net less than you would have netted at $5,400,000. On the 5.5% tier the equivalent gap sits above $10,900,000. If a buyer offers you $5.5 million and another offers $5.4 million, the lower offer is the better offer.
Ordinance No. 187692, § 21.9.2(b) (full text), effective 1 January 2023, tax operative 1 April 2023. The dead-zone arithmetic is ours, computed from the rates cited above.
And it is measured on gross — including debt the buyer assumes.
This one catches people. The ULA tax is calculated on the consideration or value "including the value of any lien or encumbrance remaining thereon at the time of sale." The base City transfer tax is calculated the opposite way — exclusive of liens. So if a buyer assumes your agency loan, that assumed balance does not count toward the base tax but it absolutely counts toward the ULA threshold. A $4.6 million equity check on a building with $1.2 million of assumed debt is a $5.8 million transaction for ULA purposes, and it is over the line.
LAMC § 21.9.2(a) and (b) per Ordinance 187692; Office of Finance FAQ.
Everything that comes off the top.
Measure ULA.
4% or 5.5% of gross value above the thresholds above, City of Los Angeles only. Zero below $5,400,000. This is almost always the largest single deduction on a sale that crosses the line, larger than a full brokerage commission.
City of LA base transfer tax.
$2.25 per $500 of value or fraction thereof — $4.50 per $1,000, or 0.45%. Measured on value exclusive of liens and encumbrances remaining at the time of sale, and rounded up to the nearest $500. Separate from and additional to ULA.
LA County documentary transfer tax.
$0.55 per $500, or $1.10 per $1,000, where the value exclusive of liens exceeds $100. Note that Los Angeles is one of five cities the County treats as a special-rate city, which means there is no credit netting the county tax down. You pay the county rate in full on top of the city rate. Cal. Rev. & Tax. Code § 11911; LA County RR/CC. The five special-rate cities are Culver City, Los Angeles, Pomona, Redondo Beach and Santa Monica.
The 9A report.
A Report of Residential Property Records and Pending Special Assessment Liens is required of the seller before entering into an agreement of sale or before close of escrow, one application and fee per parcel. The fee is $70.85. Trivial money — but the report is what surfaces open orders and pending assessments to your buyer, so the real cost is whatever it uncovers. LAMC § 96.300; LADBS Residential Property Report. Apartment buildings are squarely within the definition of "Residential Property."
LAHD registration and any open fees.
RSO, Just Cause and SCEP fees are annual, per unit, and expressly not prorated, so they are typically settled through escrow. A property in REAP carries $50.00 per unit per month plus 1% monthly interest, and clearing it requires prepaying $338 for two annual inspections.
Loan payoff, and what is attached to it.
Principal, accrued interest, and — the item that surprises people on fixed-rate agency debt — prepayment. Yield maintenance or defeasance on a low-coupon loan in a higher-rate environment can be a very large number, and it is calculated on the payoff date, not the contract date. Get a written payoff quote early; it changes your reserve price.
Prorations and the ordinary closing costs.
Property taxes, rents collected, security deposits transferred to the buyer, title and escrow, county recording. Security deposits are a transfer rather than a cost, but they leave your side of the settlement statement and owners routinely forget to reserve for them.
What $12 million actually looks like.
Rates only — this is the tax stack, not a full settlement statement.
Take a City of Los Angeles apartment building trading at $12,000,000, all cash, no assumed debt.
- LA County documentary transfer tax: $12,000,000 ÷ $500 × $0.55 = $13,200
- City of LA base transfer tax: $12,000,000 ÷ $500 × $2.25 = $54,000
- Measure ULA at 5.5% of gross: $660,000
- Total transfer tax: $727,200 — 6.06% of price
Arithmetic ours; every rate cited above. Excludes brokerage commission, title, escrow, the 9A report, prorations and loan payoff.
Six percent, before anything else. That is the number to have in your head when you are deciding whether a direct sale at a slightly lower gross is actually a lower net — very often it is not.
Now move the same building to $10,850,000, just under the top threshold. ULA drops to 4%, or $434,000. You gave up $1,150,000 of price and saved $226,000 of tax. That is not a good trade — but it shows how sharply the tax steps, and why the number just under a threshold deserves a hard look before you chase the number just over it.
Cross a city line and the whole calculation changes.
ULA is City of Los Angeles only.
It is an amendment to the LA Municipal Code and applies to realty sold within the City of Los Angeles. Santa Monica, Culver City, Inglewood, Beverly Hills and West Hollywood are separate incorporated cities and ULA does not reach them. One trap worth knowing: for a parcel straddling the City boundary, the Office of Finance applies the tax in proportion to the value transferred within City limits, falling back to square footage if no valuation is available.
Santa Monica hits harder above $8 million.
Measure GS runs three tiers per $1,000 of value: $3.00 under $5,000,000; $6.00 from $5,000,000 to $7,999,999.99; and $56.00 per $1,000 — 5.6% — at $8,000,000 and above, effective 1 March 2023. Santa Monica publishes no CPI escalator, so unlike ULA these thresholds appear to be fixed. Transfers to certain affordable housing developments by nonprofits and community land trusts may be exempt from the second and third tiers under S.M.M.C. § 6.96.51.
Culver City is genuinely marginal — and on gross.
Measure RE taxes only the portion within each band: 0.45% up to $1,499,999; 1.5% from $1,500,000; 3.0% from $3,000,000; 4.0% at $10,000,000 and above. Much gentler than a cliff. But Culver City measures on value including liens and encumbrances, and the City says so explicitly. There is also a reduced 0.45% flat rate for 100% deed-restricted affordable housing and for the first transfer of newly constructed multifamily — claimable by pre-payment verification or by refund afterward.
Inglewood, West Hollywood and Beverly Hills stay ordinary.
Inglewood levies $0.275 per $500 under its own code, but because that is a general-law city tax it carries a credit against the county tax, so the combined burden stays at $1.10 per $1,000. West Hollywood states plainly that it has no additional city transfer tax. Beverly Hills is not on the County Recorder's special-rate list, so the standard $1.10 per $1,000 applies there. We were not able to reach the Beverly Hills municipal code directly and are relying on the County's special-rate list; if you are transacting there, have your title officer confirm.
Is ULA going away? Short answer: no.
Owners keep asking whether it is worth waiting. Here is the actual record as of today.
The main challenge is over and ULA won. In Howard Jarvis Taxpayers Association v. City of Los Angeles, the Second District Court of Appeal affirmed dismissal on December 15, 2025, holding that passage of Measure ULA by a majority vote of the City's electorate was a valid exercise of the people's initiative power. The California Supreme Court denied review on March 11, 2026. That is final.
Cal. Ct. App., 2d Dist., Div. Four, No. B334071 (opinion); Supreme Court of California, conference results of 11 March 2026, No. S294863, review denied.
The statewide ballot measure that would have killed it was withdrawn. Initiative #1983, which would have barred charter-city voters from approving transfer taxes above the 0.11% state rate and unwound existing ones, became eligible on April 21, 2026 and was withdrawn on June 25, 2026. It is not on the November 3, 2026 ballot.
California Secretary of State, Initiatives Withdrawn or Failed to Qualify.
ACA 22 is on the November ballot but does not repeal ULA. It requires two-thirds voter approval for local special taxes imposed, extended or increased beginning January 1, 2027. It is prospective and contains no repeal or sunset reaching existing voter-approved taxes. Whether it would constrain ULA's annual CPI threshold adjustments is untested, and we are not going to guess.
ACA 22 (Wicks), Res. Ch. 132, filed 25 June 2026 (text).
The one thing actually worth watching: AB 736.
AB 736 would bar a local jurisdiction from collecting transfer tax where the combined local rate exceeds 1.5%, beginning January 1, 2027 — and it expressly requires a jurisdiction to cut its non-general taxes first. ULA is a special tax. Under that sequencing it would be first in line. There is a carve-out preserving general taxes that were in effect on June 30, 2026 up to 3%, but it does not help a special tax.
As of August 24, 2026 the bill is alive in the Senate but stalled: last amended June 22, re-referred to Senate Local Government, and on June 25 the committee hearing was postponed with no action since. The 2025–26 session's final day is August 31, 2026. So it is days from either moving or dying for this session.
AB 736 (Mark González), text and history, retrieved 24 August 2026.
And at the City level, the Council declined in July to put a ULA change on the ballot. What it adopted instead, 13-1-1 on July 1, 2026, was an instruction to LAHD to report back on a five-year pilot tax credit that would cut the effective ULA rate to 1.5% on sales of newly constructed multifamily meeting affordability, prevailing-wage and timing conditions. That is a report-back, not an ordinance. No such credit exists today, and it would not reach an existing older building in any event.
LA City Council File 26-0782, Official Council Action (7/1/26 meeting, issued 7 July 2026).
So: do not hold a building waiting for ULA to disappear. It is settled law, the initiative that threatened it is withdrawn, and the one live bill is stalled with a week left in session. Underwrite the tax as real, because it is.
Questions owners actually ask.
What are the Measure ULA thresholds right now?
$5,400,000 and $10,900,000, for transactions closing on or after 1 July 2026. Above $5.4M and under $10.9M the rate is 4%; at $10.9M and above it is 5.5%. The thresholds adjust each July 1 with the Chained CPI, so confirm the current figures with the Office of Finance before you sign anything.
Is ULA charged only on the amount above the threshold?
No, and this is the most expensive misunderstanding in LA multifamily. The ordinance taxes the full consideration or value once you cross the line. Crossing $5,400,000 by one dollar creates a tax on the entire price.
Does assumed debt count toward the ULA threshold?
Yes. ULA is measured on value including any lien or encumbrance remaining at the time of sale. The base city transfer tax is measured the other way, exclusive of liens. If your buyer is assuming a loan, that balance counts toward ULA.
Who pays the transfer tax in Los Angeles?
By custom in LA County the seller pays the documentary transfer tax, but it is a negotiable term and on ULA-sized deals it does get negotiated. The tax is imposed on the transaction, not on a particular party, so put it in the contract explicitly rather than relying on custom.
Does ULA apply in Santa Monica or Culver City?
No — ULA is City of Los Angeles only. But both of those cities have their own transfer taxes, and Santa Monica's top tier of 5.6% at $8,000,000 and above is steeper than ULA's first tier. Culver City's is marginal rather than a cliff, but it is measured on gross value including assumed debt.
Can I avoid ULA by selling the entity instead of the property?
Do not attempt this based on a web page. Entity-transfer treatment turns on change-of-ownership rules and the specific exemptions in LAMC Article 1.9, and the Office of Finance issues written determinations for a reason. Get one before you close, and get your attorney involved early — the Office of Finance determination letter is good for one year.
This page is general information from an active Los Angeles multifamily buyer, written to help owners understand how a sale actually works. It is not legal, tax, or accounting advice, and it is not a substitute for your own professionals. Rules change, deadlines move, and the facts of your building matter. Before you act, talk to your real estate attorney about ordinance exposure and contract terms, your CPA about basis and tax treatment, and a qualified intermediary before you close if a 1031 exchange is in play — a qualified intermediary must be engaged before the sale closes, not after.
Every figure on this page is cited to the primary source it came from, with the date we verified it. Where we could not verify a number, we say so rather than estimate.
Want the net number before you go to market?
Send the address, the rent roll and your loan payoff. We will walk the whole stack with you — including the threshold arithmetic — and tell you what a direct sale nets versus a listing. No obligation, because Beverly Group is the buyer.