Posts Tagged ‘property tax’
Mansion Tax
Real Property Transfer Tax and ULA (United to House LA)
Effective for transactions closing after June 30, 2024, the new thresholds for ULA will be $5,150,000 and $10,300,000. Transactions above $5,150,000 but under $10,300,000 will be assessed a 4% tax and transactions $10,300,000 and up will be assessed a 5.5% tax.
Does the City impose a real property transfer tax other than the special tax imposed under Measure ULA?
Indeed, the City enforces a real property transfer tax on all documents that transfer real property within its jurisdiction. The current tax, known as the "Base Tax," is calculated based on the consideration or value of the real property interest being transferred, at a rate of 0.45%. Additionally, Measure ULA introduces a special tax, termed the "ULA Tax," which is levied on top of the Base Tax.
What are the rate components of the Base Tax and the ULA Tax under the City’s real property transfer tax?
- The Base Tax rate of $2.25 per $500 or part thereof (“Base Rate”).
- The ULA Tax rates of, 1) 4% for properties conveyed over $5,000,000, but under $10,000,000, and 2) 5.5% for properties conveyed at $10,000,000 or more (“ULA Rates”).
Value of Property Conveyed
| Value of Property Conveyed | Base Rate* | ULA Rate | Applicable Tax Rate |
| > $100; ≤ $5,000,000 | $2.25 / $500 | 0% | 0.45%* |
| > $5,000,000; < $10,000,000 | $2.25 / $500 | 4% | 4.45%* |
| ≥ $10,000,000 | $2.25 / $500 | 5.5% | 5.95%* |
*Note: the City’s Base Rate is $2.25 for every $500 or fractional part thereof. A transfer in which the value of the property conveyed is not divisible by $500 will be rounded up to the nearest $500 for the calculation of the Base Tax. This does not apply to the ULA Rate calculations, which are percentage-based.
DISCLAIMER: This is not tax advice. Please refer to the link below for further information.
What are Proposition 60 and 90?
Proposition 60 and Proposition 90 are both California property tax relief measures that provide certain homeowners with the opportunity to transfer their property tax base to a replacement residence under specific conditions. Here's an explanation of each:
- Proposition 60:
- Proposition 60 allows homeowners who are 55 years of age or older to transfer the assessed value of their current primary residence to a replacement property within the same county, as long as certain conditions are met. This transfer helps homeowners avoid a potentially higher property tax assessment that would result from purchasing a new home with a higher market value.
- To qualify for Proposition 60, the replacement property must be of equal or lesser value compared to the original property, and the replacement must occur within two years of the sale of the original property.
- This proposition is especially beneficial for retirees or older homeowners who may want to downsize or move to a more suitable residence without facing a significant increase in property taxes.
- Proposition 90:
- Proposition 90 extends the benefits of Proposition 60 to homeowners who are moving to a different county within California. It allows eligible homeowners to transfer their property tax base to a replacement property in a different county, provided that the county where the replacement property is located has adopted an ordinance authorizing such transfers.
- Not all counties in California participate in Proposition 90, so homeowners should check with the county assessor's office in both the county they are leaving and the county they are moving to in order to determine eligibility and any specific requirements.
- Like Proposition 60, Proposition 90 also requires that the replacement property be of equal or lesser value compared to the original property and that the replacement occurs within two years of the sale of the original property.
Both Proposition 60 and Proposition 90 aim to provide property tax relief for eligible homeowners in California who are looking to move or downsize without facing a significant increase in property taxes. However, it's essential for homeowners to understand the specific criteria and limitations of each proposition and to consult with local authorities or legal professionals for guidance regarding their individual situations.
As of January 2022, the following counties in California have adopted ordinances to accept inter-county transfers under Proposition 60 and/or Proposition 90:
- Alameda County
- El Dorado County
- Los Angeles County
- Orange County
- Riverside County
- San Bernardino County
- San Diego County
- San Mateo County
- Santa Clara County
- Tuolumne County
- Ventura County
Please note that this list may not be exhaustive, and it's always a good idea to verify with the respective county assessor's office or consult official resources for the most up-to-date information regarding Proposition 60 and 90 inter-county transfers in California. Additionally, the specifics of these ordinances, such as eligibility criteria and limitations, may vary between counties.
PAYAM SHIRAZI, Broker
DRE: 01925601
Call: (949) 436-3936
LOS ANGELES / ORANGE COUNTY