In 2025, a Westside agent told The Real Deal about a sale over $10 million that fell apart after buyer and seller had already agreed on price. Once the tax was added, "the seller wasn't willing to absorb it, and the buyer wasn't willing to increase their number." In the same piece, another team described a deal they worked on for nearly two months that ended with the home being rented instead, because the seller "was not netting enough due to the 4 percent ULA tax."

Neither deal stalled over the value of the house. Both stalled over Measure ULA, the City of Los Angeles transfer tax that covers every estate in Bel Air and Holmby Hills. ULA works as a cliff, and in a ZIP code where most serious sales land in eight figures, the cliff affects where the price ends up as much as how much a seller keeps.

Two lines, and the rate hits the whole price

For sales closing after June 30, 2026, the City's Office of Finance applies ULA at 4% on sales above $5.4 million and below $10.9 million, and at 5.5% on sales of $10.9 million or more. That is in addition to the City's 0.45% base transfer tax, so the combined City rates are 4.45% and 5.95%.

Income tax brackets are marginal, so only the dollars above a line pay the higher rate. ULA works differently. Once a sale crosses a line, the rate applies to the entire price. Here is the ULA alone at each edge, using the current thresholds:

At the upper line, one extra dollar of price adds about $163,500 in tax. At the lower line, one dollar takes a sale from no ULA to roughly $216,000. A July 2026 report from Pepperdine and Beacon Economics put it plainly: because the tax applies "to the full transaction value rather than only the portion above the threshold," small changes in negotiated price "can produce very large differences in total taxes owed."

Above each line, a band where more money nets less

The table shows the jump. What matters more for pricing is how long it takes a seller to earn that jump back.

A sale at exactly $5.4 million pays only the 0.45% base tax and leaves the seller about $5,375,700. Just above the line, the seller pays 4.45% in combined City tax. To clear the same $5,375,700, the sale price has to reach about $5.63 million. At the upper line, a sale at $10,899,999 leaves about $10.41 million after the 4.45% combined rate. At 5.95%, the price has to reach roughly $11.07 million to match it.

The math produces two bands:

• About $5.4 million to $5.63 million: a seller here keeps less than at a $5.4 million sale.
• About $10.9 million to $11.07 million: a seller here keeps less than at a sale just under $10.9 million.

These figures count only the City's base tax and ULA. Commissions, the county's transfer tax and other closing costs change the exact edges, though not the shape. For a seller whose home appraises somewhere in those bands, the line itself works as the ceiling on price, unless the buyer is willing to pay well past the band.

The bunching already shows up in recorded sales

The research so far measured earlier versions of the thresholds, set near $5 million when ULA took effect in April 2023. None of it is a finding at today's $5.4 million or $10.9 million. But the same pattern shows up in every study.

The Pepperdine and Beacon Economics report, using Chicago Title transaction data, found that in fiscal year 2024, sales inside the City of Los Angeles "became increasingly concentrated just below the applicable ULA threshold, particularly near the $5 million cutoff," with fewer sales above it. The rest of Los Angeles County showed no such clustering. The authors call this "notching" behavior. The same report estimates that high-value sales fell about 41% relative to surrounding jurisdictions after ULA took effect.

A first-year report by Occidental-affiliated authors, published in April 2024, counted sales between $4.9 million and $5 million. They rose from 46 to 93 in ULA's first ten months, April 2023 through January 2024, compared with the same months a year earlier. A July 2025 UCLA Anderson working paper found that across City sales in 2022 and 2023, the $4.95 million to $5 million price range had 47% more transactions than the first range subject to the tax. Researchers disagree about ULA's broader effects. A Real Deal account from July 2026 describes an Occidental critique of earlier UCLA work. The clustering at the line, though, appears in every one of these datasets.

What 90077 has paid into the tax

Bel Air and Holmby Hills sit mostly above both lines, so the tax shows up there in dollars as well as in pricing. According to City data reported by The Real Deal in August 2026, ZIP code 90077, which covers Bel Air, Holmby Hills and Beverly Glen, produced $98 million in ULA revenue across 108 transactions from April 2023 through June 2026. That works out to roughly $907,000 per taxed sale on average. Only one ZIP code in the city had paid more: 90049 in Brentwood, at $125.5 million across 240 transactions. Pacific Palisades came in behind 90077 at $68.2 million.

One summer sale shows the scale. An estate of more than 17,000 square feet at 2100 Stratford Circle closed in July 2026 for $32 million. It had listed almost a year earlier at $39.9 million. The Real Deal estimated the ULA bill at close to $1.8 million. It also reported that, with the tax counted, the seller came away with less than the 2021 purchase price of $31 million. At that price, ULA cost more than an entire $1 million gain on paper.

The lines moved on July 1

ULA's thresholds reset every year based on the Bureau of Labor Statistics Chained Consumer Price Index. In fall 2025, the lines were $5.3 million and $10.6 million. For sales closing after June 30, 2026, they are $5.4 million and $10.9 million.

This matters most for homes that changed hands, or nearly did, in the last year. A $5.35 million sale that closed before July 1 owed 4% ULA, about $214,000. The same price now owes none. At the top line, sales between $10.6 million and just under $10.9 million used to pay 5.5% and now pay 4%. On a $10.8 million sale, that difference is about $162,000. Pricing comparisons and appraisals built on last year's sales near either line came from a different tax schedule. The closing date, not the contract date, decides which thresholds apply. The City's FAQ ties the current schedule to "transactions closing after June 30, 2026."

Who pays is part of the negotiation

In California, the seller customarily pays documentary transfer taxes. A December 2022 legal analysis published on Mondaq noted that buyers and sellers could negotiate to split ULA. That is why the two deals at the top of this post broke down where they did. Price was settled, but who would absorb the tax was not. One agent told The Real Deal in 2025 that "buyers have factored it into their offers, but sellers are still struggling to accept the hit to their net."

Some workarounds have been floated, and they carry real risk. The Occidental report describes consultants suggesting that sellers split a property into parcels or sell furniture separately at inflated prices to lower the stated real estate price. That is the authors' account, not a tactic the City has accepted. Before ULA took effect, a Los Angeles agent interviewed by the Los Angeles Times described a hypothetical deal split between house and furniture and called it illegal. Any question about how a specific deal is structured belongs with a tax attorney.

The tax also stops at the city limit. The Los Angeles County Recorder lists the countywide transfer tax at $0.55 per $500, or 0.11%. Only Culver City, Los Angeles, Pomona, Redondo Beach and Santa Monica add a city rate on top. Beverly Hills and unincorporated county areas are not on that list. A comparable estate just across the Beverly Hills line owes no ULA at any price.

Where the politics stand this fall

Anyone hoping to wait out the tax should know where repeal efforts stand. The Howard Jarvis Taxpayers Association withdrew its statewide repeal initiative in June 2026 after the Legislature advanced a substitute. LAist reported that the compromise left existing transfer taxes, including ULA, in place. That substitute is Proposition 43 on the November 3 ballot. According to CalMatters, it changes only the vote threshold for future local special taxes and "does not apply retroactively to taxes such as the mansion tax."

At City Hall, a council committee set aside a broad rate-cut ballot measure in May 2026. On July 1, the full council shelved a proposed exemption for new multifamily buildings and asked the Housing Department to draft a narrower pilot credit for certain multifamily and mixed-use projects. The one ULA exemption on the November ballot, Proposition TE, would apply only to homes damaged or destroyed in the Palisades fire, for five years from the January 2025 fire. None of these measures would change the math for an estate on Stratford Circle or Carolwood Drive.

A few quick answers

Does ULA apply to every home in Bel Air and Holmby Hills? ULA applies to sales within the City of Los Angeles, and ZIP code 90077 shows up in City ULA revenue data. A property partly inside the city limit is taxed on the share of its value that sits within the City.

When will the thresholds change again? They adjust each year by the Chained CPI. The current $5.4 million and $10.9 million lines apply to sales closing after June 30, 2026.

Is the 0.45% base tax rounded like ULA? No. The base tax is $2.25 per $500, and prices that don't divide evenly by $500 are rounded up. ULA is a straight percentage with no rounding.

If your Bel Air or Holmby Hills home is likely to price anywhere near $5.4 million or $10.9 million, the list price and the net you walk away with need to be planned together. We're glad to run those numbers for your property and talk through timing, presentation and private exclusive options with you. Davis + Burns Group can help. Work With Us.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.