Tax Relief Initiative for Los Angeles Property Owners

Measure ULA, also known as the “Mansion Tax,” has significantly impacted the real estate market in Los Angeles, leading to a drastic 90% reduction in commercial and residential real estate sales since its implementation. This measure imposes substantial taxes on Real Property Transfers over $5 million for homeowners, multifamily residences, and business properties within the city, whether there was a profit on the sale or not. The issue stems from a loophole in the law, created by a court decision, that bypassed long-standing taxpayer protections requiring a two-thirds vote for special taxes. Consequently, Measure ULA was able to pass with a simple majority vote.

However, there is hope for relief for property owners in Los Angeles. The Taxpayer Protection and Government Accountability Act (TPA), a statewide ballot initiative, aims to strengthen and restore crucial taxpayer protections. TPA would close the loophole by reinstating the requirement for special taxes to pass with a two-thirds vote.

TPA is seen as the solution to rectify the impact of Measure ULA, which stands as the largest tax increase in Los Angeles’ history. Additionally, TPA includes a provision that would make it effective on January 1, 2022. This means that any tax not in compliance with TPA would be invalidated after its passage in November, unless voters reapprove the measure with a two-thirds vote within one year.

Under this provision, the city would have one year to place Measure ULA back on the ballot, where it would need two-thirds voter approval to pass. In 2022, Measure ULA failed to meet this threshold, receiving only 57% of the vote.

California currently holds the dubious distinction of having the highest tax rates in the United States. Over the past decade, the state has seen significant increases in taxes and fees, exacerbating its already exorbitant cost of living. This trend is particularly challenging for hard-working families, who now face additional financial strain due to soaring inflation.

The state’s business community is also feeling the pinch of higher taxes and fees. Moreover, measures like Measure ULA in the City of Los Angeles have been implemented without adhering to the voter-approved two-thirds majority requirement, adding to the burden faced by businesses and residents alike.

Despite these challenges, there is optimism for change.

  • Gives voters the final say on all new and higher taxes
  • Requires all new taxes passed by the Legislature to be approved by voters.
    1. Restores two-thirds voter approval for all new local special tax increases, including for Measure ULA in the City of Los Angeles.
  • Eliminates all “hidden taxes”
  • Clearly defines what is a tax or fee — addressing recent court decisions that overturned decades of established taxpayer protections.
    1. Prevents unelected boards and commissions from passing hidden taxes or fees without approval from elected officials or voters.
  • Requires truthful descriptions of new tax proposals
  • Holds politicians accountable by requiring they clearly identify how revenue will be spent before any tax or fee is enacted and ensures it is not diverted to other purposes.
    1. Ensures that the tax rate and length of time a new or higher tax will be in effect is listed on the ballot.