Los Angeles Council Tables Changes to Mansion Tax

Key Points

• Los Angeles leaders declined to advance proposed changes to Measure ULA
• The proposal would have eased the tax burden on some multifamily and commercial projects
• Any changes to the voter-approved tax must go back to the ballot

Efforts to soften Los Angeles’s controversial “mansion tax” hit another roadblock this week, as the City Council declined to move forward with a proposal that would have amended Measure ULA. Instead of sending the measure to voters this June, council members voted to send the proposal back to the Housing and Homeless Committee for further analysis and public input, delaying any potential relief for developers facing the city’s steep transfer tax.

What the Proposal Would Have Done

The motion was introduced by Councilmember Nithya Raman and backed by Mayor Karen Bass. If approved, the changes would have created a 15-year exemption from the ULA tax for newly built multifamily and commercial projects, based on their certificates of occupancy. The proposal also included a temporary exemption for first residential sales in Pacific Palisades following wildfire damage and would have loosened restrictions on how ULA funds can be used. Supporters framed the measure as a targeted fix aimed at restoring development momentum without fully dismantling the tax.

Why Measure ULA Is So Hard to Change

Measure ULA took effect in April 2023 after being approved by voters the year before. It raised Los Angeles’ transfer tax to 4 percent on sales above $5.15 million and 5.5 percent on deals exceeding $10.3 million, a dramatic jump from the prior 0.45 percent rate. Because it was voter-approved, the City Council cannot unilaterally amend the tax. Any meaningful changes must go back to voters, a high bar that has stalled multiple rollback efforts since the measure passed.

Competing Views on Its Impact

Supporters of Measure ULA argue the tax is delivering results. As of November 2025, the measure had raised $1.03 billion, funding hundreds of affordable housing units and rental assistance programs aimed at preventing displacement. Housing advocates say those funds are essential as federal housing support becomes less reliable. Critics, however, point to a sharp slowdown in development. Raman cited data showing multifamily permits down 27 percent since ULA took effect, with larger buildings leading the decline. Developers and lenders have repeatedly warned that the tax is pushing capital out of Los Angeles and suppressing property values.

What This Means for Developers

For now, Measure ULA remains fully intact. The council’s decision signals continued political resistance to altering the tax, even as evidence mounts that it is reshaping deal structures and investment decisions across the city. For developers, the uncertainty adds another layer of risk when underwriting large transactions or new construction in Los Angeles. Any relief, if it comes at all, will likely be slow and require voter approval.

Bottom Line

Los Angeles leaders once again punted on changes to the mansion tax, leaving Measure ULA firmly in place. With development activity lagging and housing needs still rising, the debate over the tax’s long term impact is far from settled, but meaningful reform remains out of reach for now.