Picture two Silver Lake homes that close on the same day. One sells for $5,400,000 and the other for $5,400,001. The second seller gets one more dollar from the buyer and roughly $216,000 less after the city's transfer tax. Since July 1, 2026, a City of Los Angeles sale above $5,400,000 and below $10,900,000 owes Measure ULA's 4% tax on the whole price. That is on top of the city's standing 0.45% base tax.
The tax is not charged only on the amount above the threshold. It works as a step. Because of that, the top of Silver Lake's market has a band of prices just above the line where a higher sale leaves the seller with less money.
The dead zone, in dollars
The City of Los Angeles Office of Finance sets out the current schedule. Sales at or under $5,400,000 pay the 0.45% base rate. Sales above $5,400,000 and below $10,900,000 pay 4.45% in total. Sales at $10,900,000 or more pay 5.95%.
Applied to a few sale prices, the schedule looks like this. To keep the math simple, assume the seller pays the tax and no loan or lien carries over to the buyer. The Office of Finance calculates the base tax on net value, excluding any lien or encumbrance remaining at the time of sale, and ULA on gross value. In practice, who pays is set in the contract.
| Sale price | City transfer tax, base plus ULA | What's left after that tax |
|---|---|---|
| $5,400,000 | about $24,300 | about $5,375,700 |
| $5,400,001 | about $240,300 | about $5,159,700 |
| $5,500,000 | about $244,750 | about $5,255,250 |
| $5,626,000 | about $250,360 | about $5,375,640 |
The last row is the one that matters. A home has to sell for about $5.63 million just to leave the seller where a $5.4 million sale would have. Every price between the line and that point is a raise for the buyer's agent's spreadsheet and a pay cut for the seller.
That is why the top of the market here behaves the way it does. A seller who might have accepted $5.5 million in a world without the step has a reason to accept $5.4 million or less. A buyer looking at a home listed in the dead zone holds leverage that has nothing to do with the house.
The pattern shows up in the sales data
Economists call this "notching," and in July 2026 a team at Pepperdine's School of Public Policy and Beacon Economics measured it directly. Their report found that before ULA, sale prices in the City of Los Angeles were spread much like those in the rest of the county. After it took effect, the city's sales began to bunch up.
"In FY 2024, transaction activity within the City of Los Angeles became increasingly concentrated just below the applicable ULA threshold, particularly near the $5 million cutoff."
The authors found the same clustering in single-family and multifamily sales, and no matching pattern in the rest of Los Angeles County. They tie it to the fact that crossing the line taxes the full price, "rather than only the portion above the threshold." They also estimated that high-value sales in the city ran about 41% below what surrounding areas would predict. They are careful to say their data cannot tell whether those missing sales were repriced under the line, delayed, moved elsewhere, or never happened. The research was supported by the Greater Los Angeles Association of Realtors and the Arthur N. Rupe Foundation, and the authors say they chose the design and conclusions on their own.
Other researchers reached similar results by different methods:
- The UCLA Lewis Center reported in April 2025 that the odds of a Los Angeles property selling above the threshold fell by as much as 50%, with the strongest effect in non-single-family sales.
- RAND estimated in May 2026 a 31% drop in high-value sales through early 2026.
- A peer-reviewed study in the Journal of Public Economics, published in August 2026, estimated that high-value transactions fell about 50%.
The numbers differ because the periods and methods differ. All four point the same way.
Why Silver Lake feels it more than its neighbors
Most of Northeast LA trades well below $5 million, so the line rarely comes into play there. Silver Lake's hillside top end reaches it. The Eastsider has reported a three-bedroom hilltop mid-century with a pool on Redcliff Street selling for $6.3 million, well into the taxed tier.
In January 2026, Robb Report covered 2638 Lake View Terrace. The 1931 hillside house was reworked by architect Barbara Bestor, who finished the overhaul in 2022, and was listed at $5.3 million. At the time, that asking price sat exactly on the city's previous threshold of $5.3 million, the untaxed side of the line then in force. Whatever went into that price, it shows how closely the neighborhood's top listings now sit to the step.
The comparison buyers make at this price point sharpens the effect. A home of similar size just over the city line doesn't face the same math. Pasadena's adopted FY2027 schedule lists a city real property transfer tax of $0.55 for each $500 of value, and Glendale's municipal code sets 27.5 cents for each $500. Los Angeles County also charges its own documentary transfer tax of $0.55 per $500. None of those rates jumps at a price threshold, so a $5.5 million house in Pasadena is just a $5.5 million house.
The line moves every July, and closing dates decide which side you're on
This is the part that catches people mid-escrow. Measure ULA's thresholds adjust every year with the Bureau of Labor Statistics' chained Consumer Price Index. The current $5.4 million and $10.9 million figures apply to transactions closing after June 30, 2026. LAist was still citing $5.3 million and $10.6 million on July 1, which shows how quickly the old number lingers in circulation.
For a Silver Lake sale near the line, the calendar works like this:
- The threshold in force depends on when the transaction closes, not when the listing went live.
- A price that cleared the old line by a small amount may fall under the current $5.4 million line, and the reverse can happen to a deal whose escrow runs past June 30 into a new fiscal year's figure.
- Comparable sales from before July 2026 were priced against a different line, so a comp at $5.35 million from last spring means something different today.
Each of these lands on the settlement statement as a dollar amount.
Why the line isn't going anywhere this fall
Several efforts to change ULA came and went in 2026. In December 2025, in an opinion from the California Court of Appeal, the court affirmed dismissal of the challenges and called the measure a valid use of the voters' initiative power. In late June, a statewide initiative that would have repealed ULA was pulled after negotiations in Sacramento. According to LAist, the deal produced Proposition 43, which would raise the approval threshold for new special taxes to two-thirds but does not cut ULA. On July 1, the City Council shelved a proposed exemption for new apartments rather than send it to voters.
The one ULA question on the November 3 ballot is Proposition TE. According to the City Clerk's voter pamphlet, it would give a one-time exemption or refund for residential properties damaged or destroyed in the Palisades Fire and sold by January 6, 2030 by the person who owned them when the fire began. LAist reported that the Council voted 13 to 1 to put it on the ballot. Whatever the result, it does not reach Silver Lake.
The revenue also gives the tax staying power. The Los Angeles Times reported on September 23, 2026, that ULA has raised more than $1.3 billion since 2023. In the same LAist report, UCLA researcher Mott Smith expected the fight to resume: "Already, everybody is gearing up for the 2028 election."
A few quick questions
Does ULA apply to every Silver Lake sale? No. According to the Office of Finance, sales at or below $5,400,000 pay only the 0.45% base tax.
Is the 4% charged only on the amount above $5.4 million? No. The ULA rate applies to the full value conveyed once a sale crosses the threshold, and that is where the step comes from.
What happens at $10.9 million? The ULA rate rises to 5.5%, for a combined 5.95% with the base tax. That creates a second step, worth about $163,500 at the line.
This post is general information about how the tax is structured. It is not legal, tax or financial advice, so please confirm how these rules apply to your own sale or purchase with a qualified attorney or tax professional.
If you're pricing a Silver Lake home near the line, or weighing an offer on one, the details of timing and price matter more here than almost anywhere else in the market. Tracey Kardash can walk through the numbers with you before anything goes on paper. Let's Connect.
