The So-Called “Mansion Tax” — How It Negatively Impacts Real Estate

July 14, 2025
devinlucas

Los Angeles’ so-called “Mansion Tax” and similar provisions in San Jose and elsewhere are not just L.A. or San Jose problems — they’re a warning shot for property owners across Orange County and elsewhere. Branded as a luxury tax, L.A.’s Measure ULA has stalled high-value transactions, slashed property tax revenues, and deterred housing development.

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California has always been a hotbed for tax experiments—and Measure ULA, the so-called “Mansion Tax” in Los Angeles, is no exception. Branded as a way to fund affordable housing, this transfer tax imposed a 4% fee on property sales over $5 million and a 5.5% fee on sales over $10 million within the City of Los Angeles. But as recent studies confirm, the negative impacts reach far beyond the luxury market—and far beyond Los Angeles.

What Measure ULA Means for High-End Property Owners — And Why Orange County Should Pay Attention

Measure ULA was sold as a tax on ultra-wealthy homeowners, but in reality, it targets:

Commercial and income-producing properties
Multifamily housing developments
Mixed-use and industrial properties
Owners, trustees, and investors—not just homeowners

The UCLA Lewis Center’s April 2025 study confirms what many in the real estate world already suspected:

High-value property transactions in Los Angeles dropped by 30-50% after ULA’s implementation.
The tax severely impacts the turnover of commercial, industrial, and multifamily properties—the exact turnover needed to spur housing production, investment, and revitalization.
The policy has slashed property tax reassessment opportunities, costing the city (and overlapping tax districts) millions in annual property tax revenue.
The measure may hurt affordable housing production by deterring development.

Why Newport Beach and Coastal Orange County Should Care

Bad policy ideas tend to spread in California. We’ve already seen cities explore “copycat” measures or discussions of similar transfer taxes across Southern California. With rising home values and institutional ownership of multifamily assets in Orange County, this issue matters—whether you’re a seller, developer, trustee, or investor.

At Lucas Real Estate Group, we stay ahead of the curve, helping our clients:

Structure transactions to maximize tax efficiency
Navigate legal and disclosure obligations
Advise on property sales, management, and investment strategies
Represent high-net-worth clients in confidential and complex deals

We believe that understanding the legal, tax, and market consequences of policies like Measure ULA is critical—especially before they creep closer to Newport Beach, Costa Mesa, and neighboring communities.

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Questions or Need Help?

Thinking of selling California real estate, we would love the opportunity to assist – we provide full service sales and property management in Newport Beach, Costa Mesa and surrounding areas. For a free brief consultation, contact us anytime:

Email: info@lucas-real-estate.com
Phone: (949) 478-1623
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— Devin Lucas
Real Estate Broker, REALTOR®, and Real Estate Attorney

Lucas Real Estate Group, in partnership with Coldwell Banker Newport Beach and the Coldwell Banker Global Luxury program, offers unmatched expertise in California real estate sales, property management, and real estate tax planning strategies, including Propositions 13, 58, 193, 60, 90, and new Proposition 19.

Want to discuss real estate laws, tax planning, tax considerations, private sales, intra family sales, or real estate legal matters? We conduct paid one-hour confidential consultations via Zoom, walking families through Prop 19 impacts, potential tax exposure, capital gains considerations, and the pros and cons of gifting, sales, LLCs, or hybrid solutions. For discussions requiring real estate legal advice, private family sales, family transfers, or tax-related matters, please schedule a paid one-hour consultation via Zoom, phone, or in person using this calendar (Book a consultation here.) Upon booking, you’ll receive instant confirmation and a Zoom link if applicable.

Thinking of selling California real estate or seeking a new property management company? We would love the opportunity to assist – we provide full service sales and property management in Newport Beach, Costa Mesa and surrounding areas. If you are seeking to sell or professionally manage your home in Newport Beach, Costa Mesa or the surrounding areas, call or email anytime for a free brief consultation – info@lucas-real-estate.com or 949-478-1623.

Devin R. Lucas is a Real Estate Broker, REALTOR®, and Real Estate Attorney specializing in Newport Beach, Costa Mesa, and Orange County coastal communities. Courtney Lucas, CPA, REALTOR®, and Real Estate Salesperson, provides expert financial insight alongside real estate services.

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