The “mansion tax” was supposed to bring in $56M monthly. It took in $3.6M

Measure ULA went into effect April 1

By TRD Staff

Mayor Karen Bass (Getty)

A new real estate transfer tax in Los Angeles was supposed to give the city an average of $56 million a month in its first year. In its first month, the Measure ULA tax took in $3.6 million.

For transactions closing in April, the city received the revenue from five deals that were subject to the new tax, Bisnow reported.

The so-called “mansion tax,” which went into effect April 1, adds a 4 percent tax on real estate transactions of more than $5 million and a 5.5 percent tax on transactions over $10 million.

It was expected to generate $672 million in its first year, at a needed pace of $56 million a month, to support affordable housing and homeless programs.

Supporters of the new tax weren’t surprised the first month’s receipts weren’t tracking with annual estimates.

Eli Lipmen, executive director of Move L.A. , said its supporters expected to see a rush to close deals before the tax launched, followed by an expected lull. He said its backers were “in this for the long haul.”

Via The Real Deal