What transfer taxes do I pay when selling an apartment building in Los Angeles?
Three layers can apply. LA County charges documentary transfer tax of $1.10 per $1,000 of price (0.11%) on every sale, and the City of Los Angeles adds its own $4.50 per $1,000 (0.45%), making the combined base 0.56% for any sale inside city limits. Then Measure ULA stacks on top for larger deals: currently 4% on sales of roughly $5.4M and above, and 5.5% at roughly $10.9M and above — applied to the entire price, not just the amount over the threshold, with thresholds that adjust each July. By custom the seller pays all of it, straight off the top of net proceeds.
How the stack hits real numbers.
On a $3M sale in the City of LA: $3,300 county plus $13,500 city — $16,800, an annoyance. On a $6M sale: $6,600 county, $27,000 city, and $240,000 of ULA — $273,600 before commission or loan payoff, because ULA applies to the full price the moment you cross the threshold. That cliff makes pricing strategy real: a building that clears $5.35M versus $5.45M nets very different money, and I have structured more than one deal around exactly that line. The ULA thresholds index annually each July 1 (they started at $5M and $10M in 2023), so verify the current figures before underwriting. Cities keep their own counsel too — Santa Monica and Culver City run their own tiered transfer taxes, so the same building two blocks over can face a different stack entirely.
Who pays, and what it does to your net.
Custom in LA County puts documentary transfer taxes on the seller, and the ULA ordinance places liability on the seller as well — everything in escrow is technically negotiable, but expect to pay these yourself in any normal transaction. The practical takeaway: transfer taxes belong in your net-proceeds math on day one, next to commission, prorations, and loan payoff. For buildings anywhere near the ULA threshold, they can be the single largest closing cost and can change the answer on whether to sell, hold, or exchange. ULA has enough moving parts — exemptions, litigation history, annual adjustments — that it earns its own discussion; see my dedicated guide at /guides/ula-transfer-tax for the full treatment.
Does ULA tax only the amount above the threshold?
No — it applies to the entire sale price once the threshold is crossed. A sale one dollar over the line pays the full 4% on every dollar, which is why the cliff drives pricing decisions.
Do transfer taxes apply if I sell my LLC instead of the building?
Often yes. A transfer of a controlling interest in an entity that owns LA real estate can trigger documentary transfer tax, and structures built purely to dodge transfer tax draw scrutiny. Get real legal advice before going down that road.
Are the ULA thresholds fixed?
No — they adjust annually each July based on inflation. The 4% and 5.5% rates have held, but verify the current thresholds with the LA Office of Finance before pricing a sale near the line.
SHAYA LOWENSTEIN · LYON STAHL INVESTMENT REAL ESTATE · DRE #01942326 · (323) 944-2221