In an effort to curb homelessness in Los Angeles, a group called United to House L.A. (ULA) sponsored a measure to increase Documentary Transfer Taxes (DTT) in the city of Los Angeles, which landed on the November 2022 ballot. That measure is now leading by a considerable margin, as the final votes are tallied and could create several thousand new housing units a year as well as rental assistance to prevent more citizens from becoming homeless.
The measure dubbed the “Mansion Tax” calls for a 4% DTT on sales of more than $5 million and 5.5% on sales of $10 million or more. The new tax would be in addition to the existing DTT imposed by the city of Los Angeles, which is imposed at a combined city and county rate of 0.56%, and differs from the existing DTT imposed by the city and county of Los Angeles as the new tax appears to include the value of liens or encumbrances remaining on the property at the time of the sale, which are currently excluded.
By one analysis, about half the new taxes would come from the sale of commercial properties and about one-fourth from apartment buildings and other multifamily residences. This could mean more than $900 million annually to the city, compared to the $207 million it gets now in DTT.
The local experts at Ryan will continue to monitor the pending results and assist clients with strategies for tax minimization. Learn more about our team, and please reach out if you have any questions.
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