Transfer tax in LA, Santa Monica on track to go to the polls

0
(Illustration by The Real Deal with Getty)

With many votes still uncounted, early results show strong support for the ULA measure, a controversial transfer tax that could ripple through the City of Los Angeles’ commercial and luxury residential markets for years.

Tuesday’s ballot measure would add a 4% tax on real estate sales in the City of Los Angeles worth between $5 million and $10 million, with the tax rising to 5.5% on sales over $10 million of dollars.

On Wednesday morning, the referendum was leading by around 7 percentage points, with around 252,000 votes in favor and 218,000 against. Those totals reflected about 44% of all the city’s expected votes, according to the LA Times, so the result could still change in the coming days when the county finalizes its vote tally.

Revenue generated from the tax, which applies to commercial and residential transactions, would be used for housing the homeless. On Wednesday, as the dust from a frenetic election night still settled, some groups advocating the measure were cautiously optimistic.

“Votes are still coming in, but things are looking good,” tweeted an account for United to House LA, a nonprofit that backed the measure. “People power > real estate lobby.”

The tax had been aggressively opposed by some industry groups, who argue the higher tax will chill the city’s market, discourage development and even drive wealthy residents out of Los Angeles.

“That sounds good,” Dan Yukelson, executive director of the Greater Los Angeles Apartment Association, said earlier this fall. “It’s a big rallying cry for voters – ‘We’re going to take all this money from the rich and help the homeless.’ In the long run, it’s going to come back and bite our ass.

As the vote approached, Los Angeles’ large luxury residential sector, including top brokers such as Stephen Shapiro and Jason Oppenheim, were particularly agitated by the prospect of the so-called tax on mansions, some homes brokerage sending explosive emails in a last-minute mobilization.

Analysts have predicted that residential sales that fall around the margins of the two tax thresholds — $5 million and $10 million — could be hit hardest, along with some residential development projects, as the higher tax makes some projects more difficult to trace. But the biggest impact is likely to be in the city’s commercial market, where nearly all large transactions would be subject to the tax.

Two similar measures were also on the ballot in Santa Monica: With the majority of the city’s votes counted, the GS measure, which would add a 5.7% tax on transactions over $8 million, was on the ballot. point of being adopted. The other measure, which would add a lower transfer tax of 2.5%, was about to be rejected.

Share.

Comments are closed.