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Update on Measure ULA: California’s Real Estate Transfer Tax Measures
July 14, 2024 0 Comment Category: UncategorizedThe landscape of California’s real estate transfer tax measures, particularly Measure ULA, has seen significant changes recently. The California Supreme Court removed the proposed repeal of the “Mansion Tax” from the November ballot on June 20, 2024. However, opposition to Measure ULA remains active.
Key Considerations for Property Owners
- Financial Impact
Measure ULA imposes a 4% tax on sales between $5 million and $10 million, and a 5.5% tax on sales over $10 million. Property owners should consider how this tax could influence pricing and sales strategies. - Market Dynamics
Legal challenges may cause fluctuations in the real estate market. Staying informed about these changes is crucial for adjusting investment strategies accordingly. - Legal Obligations
Compliance with Measure ULA and any future changes is essential to avoid penalties. Consulting with legal professionals can help navigate these complexities.
Current Legal Challenges
A group opposing Measure ULA has another chance to challenge the City of Los Angeles’ real estate transfer tax. The U.S. Court of Appeals for the Ninth Circuit will review the case, with arguments set for October. Newcastle Courtyards, a key opponent, argues that Measure ULA was misrepresented to voters as a “mansion tax” affecting only “millionaires and billionaires,” but it unfairly burdens sellers in distress or selling at a loss. The City of Los Angeles maintains that ULA is a voter-enacted tax funding public good programs, including affordable housing and tenant services.
To date, the city has raised $252.9 million through Measure ULA, which is below its fiscal year target. If the Court of Appeals reverses the dismissal, the city might seek a review by the U.S. Supreme Court.
Potential Statewide Implications
The California Business Properties Association has proposed the Taxpayer Protection and Government Accountability Act, which aims to eliminate Measure ULA and other special taxes. The California Supreme Court is deliberating on whether this proposal will appear on the November ballot.
Final Thoughts
Understanding the implications of Measure ULA and staying informed about legal developments is crucial for property owners. For expert advice on managing your real estate investments, contact Davidovich Stein Law Group.
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