Los Angeles has taxed home sales above $5 million since April 2023, and three years of closed sales now show something the ordinance's authors probably didn't intend: sellers aren't just avoiding the tax, they're pricing to a number that has moved twice, and the market above the line looks nothing like the market below it.
Measure ULA, the city's transfer tax on high-value property sales, charges 4% on the portion of a sale between roughly $5.15 million and $10.9 million, and 5.5% above that. Both thresholds rise every year. In 2026 the lower one sits at $5.4 million. A revised version of the measure is expected on the November 2026 ballot, which makes this a live question for anyone near either line, not a settled piece of history.
Two different prices, two different years
Before the tax existed, closing prices in Los Angeles were spread evenly across the $4.8 million to $5.5 million range with no particular pattern. That changed the moment the tax did.
In the first two years after Measure ULA took effect, prices piled up in one place: 32 of the roughly 90 Los Angeles closings between $4.8 million and $5.5 million landed in a single $25,000 band, $4,975,000 to $4,999,999, while every neighboring band saw only a handful of sales. Sellers were pricing to the round number the tax is known by, not the actual legal cutoff, which by then already sat above $5.15 million.
By 2025 and 2026, a second cluster had formed. The original band near $4,975,000 is still elevated, but a new concentration of 30 closings has appeared at $5,275,000 to $5,299,999, tracking the tax's current, higher threshold rather than the original $5 million figure everyone still calls it by. A smaller cluster sits at $5,125,000 as well. Sellers, in other words, are now anchoring to two different lines at once: the one the tax is famous for, and the one it actually enforces.
The number people are avoiding isn't the number in the ordinance. It's the number the ordinance is nicknamed after.
Above the line, the market behaves differently
The tax doesn't change what a home is worth. It changes who's willing to buy it and how long that takes. Looking at every Los Angeles closing since Measure ULA took effect:
| Tier | Closings | Cash share | Median days on market |
|---|---|---|---|
| Under $5M | 25,592 | 22.9% | 21 days |
| $5M – $10.9M (4% tier) | 611 | 12.6% | 31 days |
| $10.9M+ (5.5% tier) | 178 | 15.7% | 55 days |
Two things stand out. Cash share is lower, not higher, in the taxed tiers, which cuts against the idea that an all-cash buyer is somehow more willing to absorb a transfer tax. And homes above $10.9 million sit on the market for a median of 55 days, more than double the pace below $5 million. The tax doesn't just move where prices land; it slows down everything above the line it drew.
The segment dipped once, and recovered
The tax's critics predicted a lasting slowdown in $5 million-plus sales. The annual closing counts don't support that, at least not anymore:
| Year | $5M+ closings in Los Angeles |
|---|---|
| 2019 | 179 |
| 2020 | 198 |
| 2021 | 336 |
| 2022 | 269 |
| 2023 (tax begins) | 180 |
| 2024 | 186 |
| 2025 | 319 |
| 2026 (through August) | 197 |
The dip is real and it's exactly where you'd expect it, in the two years around the tax's start. But 2025's total is the second-highest year in this dataset, ahead of every pre-tax year except 2021. Whatever adjustment period the tax caused, the segment has been through it.
What this means if you're near the line
Three things worth knowing before you list a home anywhere close to either threshold:
- Pricing right at $4,999,999 no longer avoids as much as it used to. With the threshold now at $5.4 million, a home priced just under $5 million is leaving room on the table that the actual law doesn't require it to leave. The newer cluster near $5,275,000 to $5,299,999 is the more precisely calibrated move.
- Budget more marketing time above $10.9 million. A 55-day median is not a sign of a stalled deal; it's simply the going rate for that tier right now, and pricing or timeline expectations should be set accordingly from day one.
- Watch November. The threshold has moved every year since the tax began, and a revised measure on the ballot could move it again. A number that's true today may not be true when your escrow closes.
None of this is a reason to avoid selling above $5 million in Los Angeles. It's a reason to price with both numbers in mind, the one the tax is nicknamed for and the one it actually charges. If you're weighing a sale near either line, talk to the California Collective agent who works your specific pocket of the city; the right number depends on exactly where your home sits relative to both.