Los Angeles Mansion Tax Faces Repeal in November Election

A proposal that would nix Los Angeles' controversial "mansion tax" has qualified to be on California's general election ballot in November.

Sponsored by the Howard Jarvis Taxpayers Association, which advocates for lower taxes in California, the measure would both sharply cap municipal transfer taxes—fees on real estate sales—and make it harder for voter-sponsored campaigns to raise taxes in future local elections. 

Cities with existing high transfer taxes would see them slashed, and special taxes that were approved by majorities of less than two-thirds—such as Measure ULA in Los Angeles, approved by 58%—would be repealed, according to Cal Matters.

"Californians have been fed up with getting taxed to the hilt, hence why there has been a tremendous amount of out-migration from the state," Coldwell Banker agent Cara Ameer, who sells in both California and Florida, tells Realtor.com®.

"Many feel trapped by policies that penalize people simply for selling a home, and these are hardworking people who pay enough in other taxes," she says. "If this new measure passes, it could stimulate and encourage people to make moves within the state along with development to help create more housing opportunities."

Measure ULA adds a 4% tax on the total transaction for property sales of $5.3 million to $10.6 million and a 5.5% rate for sales above $10.6 million. That tax is on top of a 0.45% tax Los Angeles already levied on all real estate deals. Both taxes are typically paid by the seller.

The tax, which took effect in 2023, has drawn strong backlash from some wealthy California residents.

"Your property is not safe in blue states," venture capitalist and prominent Trump adviser David Sachs declared on The Atlas Society, an Ayn Rand-themed podcast. "Wealthy people who have a choice where to park their money are increasingly realizing that. Real estate in blue states is dangerous."

The new ballot proposal, dubbed the "The Local Taxpayer Protection Act to Save Prop. 13," garnered more than 962,106 signatures, making it eligible for the Nov. 3, 2026, election ballot, according to a statement released by Secretary of State Shirley M. Weber.

Proposition 13, adopted by voters in 1978, mandates a property tax rate of 1%, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2% per year until the next sale. 

Measure ULA, and other "special" taxes that go into effect, seemingly contradict Proposition 13, hence the name that the Howard Jarvis Taxpayers Association gave its own proposal. The official title for the measure won't be known until June, according to a post on the sponsor's official Facebook page.

Why the mansion tax debate is important

Measure ULA, colloquially known as the "mansion tax," is designed to create a permanent funding stream for affordable housing development and homelessness prevention. But critics say it has stifled home sales at the high end of the market.

"In Los Angeles, the so-called mansion tax has had a noticeable impact on deal volume, with some sellers delaying listings and buyers becoming more price-sensitive when factoring in the added cost," Cory Weiss of Douglas Elliman in Los Angeles tells Realtor.com.

On the other hand, proponents say the "mansion tax" has generated over $1 billion and counting, funding new affordable housing projects, homeownership initiatives, low-income tenant assistance, and eviction defense legal services.

The main proponent of Measure ULA, United to House LA, says that the tax has so far advanced 795 affordable homes, with thousands more in the pipeline, helped over 10,000 renters remain housed, and created thousands of construction jobs. The coalition says a repeal of the tax would benefit only the rich.

"MAGA funders like Geoff Palmer and Peter Thiel underwrote the Jarvis measure to overturn ULA and slash the services that Californians depend on,” Carla De Paz, director of organizational strategy at Community Power Collective, said in a statement.

"Voters said that it's time for the rich to finally pay their fair share, and created a billion dollar fund to address the housing crisis paid strictly by millionaires and billionaires," said United to House LA Executive Director Joe Donlin. "It’s foolish to ask the voters to give that fund away to developers building high-rent buildings to flip."

However, critics of the mansion tax say it has had a chilling effect on development, discouraging investment in new multifamily and affordable housing—the very thing that the taxes were supposed to help fund. 

This is partly because the tax doesn't just apply to "mansions," but all property sales hitting the dollar thresholds, including apartment buildings, commercial properties, and vacant lots.

"The structure of ULA now disincentivizes investment in exactly the kind of buildings that we are saying are going to help us meet our housing shortage," City Councilmember Nithya Raman, who is running for mayor and has worked to reform ULA, said in speech to the city council. "Multifamily, mixed-use housing, commercial production has slowed in the city of L.A., lenders and investors are backing away from this city entirely."

She has proposed a ULA amendment that would offer "a 15-year exemption for newly constructed multifamily, commercial, and mixed-use projects [and] a temporary exemption for properties in fire-impacted areas."

The amendment was declined by the full city council for the June ballot, and referred to the Housing and Homeless Committee for further analysis and public input.

Raman told Realtor.com exclusively that she opposes the Jarvis measure. "The Jarvis measure has real potential to eliminate one of the LA’s few dedicated tools for addressing the housing crisis, and would completely undermine many local jurisdictions’ ability to deliver on basic services like funding for schools and paved roads," she said in an email.

"I saw that risk coming, which is why I proposed a local fix for ULA on our terms.”

Realtor.com senior economist Joel Berner agrees that Measure ULA has been putting developers off investing in much-needed multifamily buildings in L.A. because the transfer tax makes these projects less profitable.

"L.A. is facing a serious housing shortage, and this tax is preventing it from solving the issue," he says. "Exempting apartment buildings from the tax would help, as investors could buy and sell them for redevelopment more easily and builders could resume operation in the city without fear of being unable to sell their building upon completion."

Weiss agrees that if "the Local Taxpayer Protection Act to Save Prop. 13" passes, it could spur new development in a state with a critical lack of housing, saying, "For new developments, lower transfer taxes can make projects more feasible, especially on higher-priced product where margins are already tight."

If the proposed constitutional amendment is passed by voters, it would cap rates at a little more than one-twentieth of 1% of the value of the property, according to Cal Matters.

Additionally, the electoral support needed to pass these types of "special" tax measures would rise to two-thirds, up from a simple majority of more than 50%. 

Should the Jarvis measure succeed, questions remain as to how the state would replace the billions it will lose.

"No one likes paying taxes, myself included," Los Angeles investor Jameson Tyler Drew, who works with state and local legislatures to fight against this specific initiative, tells Realtor.com. "But without substituting an additional revenue source, this will leave local governments in serious financial trouble."

"I'll be the first to attest that many of those governments are inefficient and downright corrupt at times, but the services they provide to the neighborhoods where we buy and sell our homes are invaluable," he says. "The recreation center where you send your kids in the summer, as well as the local teacher, cop and firefighter, are all paid for by transfer and property taxes.

"These all add to your home's value. If these services will disappear or become greatly diminished, your home's value will fall as a result."