Mayor LA aims to interrupt the ULA tax of the city - commercial observer

Los Angeles’ Measure ULA The tax will mark 2 years in early April, but now there is the possibility that it will not reach this stage.

To the mayor Karen Bass Last week she told reporters at a press conference that her office sought to temporarily suspend the measure – known colloquially as the “mansion tax” of the city – to help the reconstruction process for people who lost their homes in the Palisades fire earlier this year. But it is not clear if and for how long, this suspension could be possible.

“There are two schools of thought,” Bass said. “One is that (ULA suspension) cannot happen, they have to return to voters. And the other is that they could happen with actions from the Council and the City Hall. We have this investigated through our lawyers right now. “

A representative for Bass’s office did not immediately respond to a request for additional comments or more information.

The ULA fee has gone through a difficult way since it first entered into force in April 2023, opinioning multiple legal challenges And so far, obtaining significantly lower revenues than the city officials have been designed for the first time and, at least, in part, causing a scary effect on the investment sales market. The measure requires a 4 percent fee on all sales of properties of over $ 5.15 million and a 5.5 percent fee per transactions over $ 10.3 million. While the tax has collected nearly $ 600 million since it was entered, largely by unifamilial housing sales, the figure is even smaller than $ 604.6 million designed in the city budget only for the last fiscal year.

The Municipal Council of LA In December approved guidelines for the way the city could spend some of the income So far, about $ 168 million for tax year 2024-25 has been accumulated. This includes approximately $ 133 million for the construction and renovation of affordable homes, $ 21 million for tenants’ assistance programs and $ 13 million for administrative costs.

The volume of commercial real estate sales in LA has also decreased Ulaa, determined by a multitude of factors, including high interest rates and lower demand. By the end of the third quarter last year, the city registered a 40 % decrease in sales of commercial properties compared to the same period of 2023, According to a report from The capital of the mare at the time.

Nick thrombola can be contacted [email protected].