Why Buying in Beverly Hills Avoids the LA Mansion Tax

By Jade Mills

At the top end of the Los Angeles real estate market, a city boundary is far more than a simple line of demarcation. When selling or buying a home, which side of the line you're on can carry very different tax implications, even for properties only a few miles apart, such as those in Beverly Hills, Bel Air, or Holmby Hills.

The reason is straightforward: as its own incorporated city, Beverly Hills and the properties located within its city limits are not subject to the City of Los Angeles' Measure ULA, more commonly known as the "mansion tax."

Key Takeaways

Beverly Hills, as a separate incorporated city within Los Angeles County, avoids the City of Los Angeles' Measure ULA.
Measure ULA applies to qualifying real estate transfers within Los Angeles city limits, including Bel Air, Brentwood, and Holmby Hills.
As of July 1, 2026, the ULA thresholds are $5.4 million and $10.9 million.
The tax is calculated on the full sale price once a transaction reaches the applicable threshold, not simply the amount above it.
Although ULA is generally a seller-side cost, its absence can influence pricing, negotiations, and the economics of a luxury transaction.

It Comes Down to the City Boundary

The simplest explanation is also the most important: Measure ULA is a City of Los Angeles tax.

Beverly Hills has been independently incorporated since 1914 and maintains its own municipal government, zoning regulations, planning processes, and local tax structure. That places it outside the jurisdiction of Los Angeles city ordinances such as Measure ULA.

Though surrounded by several Los Angeles neighborhoods, Beverly Hills (including Trousdale Estates) remains a separate municipality within Los Angeles County.
Measure ULA applies only inside Los Angeles city limits.
Mailing addresses can be misleading, and a Beverly Hills-style address or 90210 ZIP Code does not automatically mean the property lies within the City of Beverly Hills.

I frequently emphasize that latter distinction. For example, both Beverly Park and Beverly Hills Post Office properties may carry a Beverly Hills mailing address while actually sitting within the City of Los Angeles. Bel Air and Holmby Hills are also Los Angeles neighborhoods, despite their close geographic and real estate relationship with Beverly Hills.

The Numbers Become Significant Very Quickly

Measure ULA took effect in April 2023 after Los Angeles voters approved it in 2022. Its thresholds adjust annually for inflation.

For transactions closing after June 30, 2026, the current structure is:

Sales above $5.4 million but below $10.9 million are subject to a 4% ULA tax.
Sales of $10.9 million or more are subject to a 5.5% ULA tax.
The applicable percentage is imposed on the full sale amount once the threshold is reached.

That final point is particularly important. If a Los Angeles property sells for $12 million, the 5.5% ULA rate is applied to the full $12 million, producing $660,000 in ULA tax alone. The same $12 million sale inside Beverly Hills does not trigger Measure ULA.

Beverly Hills transactions remain subject to the standard Los Angeles County documentary transfer tax, which is currently $1.10 per $1,000 of consideration. On a $12 million transaction, that works out to approximately $13,200, assuming the full sale price is taxable for documentary transfer-tax purposes.

The difference between those two transactions is therefore substantial, even before accounting for Los Angeles' separate base city transfer tax. And it's not just on residential sales. Investors should note that commercial, industrial, and multi-family sales within the city of Los Angeles are also subject to Measure ULA.

Why Buyers Should Care About a Seller-Side Tax

I am sometimes asked why a buyer should care about Measure ULA if the seller typically pays it.

Because sellers negotiate based on what they ultimately receive.

A seller facing a multimillion-dollar transfer-tax obligation may be less flexible on price, more focused on net proceeds, or more interested in carefully structuring the timing and terms of a transaction. Remove that obligation, and the economics change.

Pricing decisions can be different, and sellers inside Los Angeles may factor ULA into their expectations for net proceeds.
Negotiating room can shift, and a Beverly Hills seller does not have to account for the same 4% or 5.5% additional city tax.
Comparable homes can have very different transaction costs, which becomes particularly relevant when a buyer is considering properties on opposite sides of the Beverly Hills-Los Angeles boundary.

At $20 million, the distinction becomes even more dramatic. A qualifying Los Angeles sale would generate $1.1 million in ULA tax alone. At $50 million, the figure rises to $2.75 million. Those numbers are large enough to influence how sophisticated sellers evaluate offers, particularly when multiple properties could satisfy the same buyer.

Beverly Hills Is Not the Only ULA-Exempt Luxury Market

This distinction isn't unique to Beverly Hills. Other independently incorporated cities within Los Angeles County are also outside Measure ULA's jurisdiction, including Malibu, Santa Monica, and West Hollywood.

That does not mean every one of those cities has the same transfer-tax structure. Santa Monica, for example, maintains its own high-value real estate transfer tax. The absence of ULA should never be interpreted as an absence of all local transfer taxes.

That is why I prefer to evaluate each property individually rather than make assumptions based on ZIP Code, neighborhood name, or mailing address.

For Beverly Hills specifically, however, the contrast with neighboring Los Angeles communities is unusually relevant because buyers often compare properties in Beverly Hills, Bel Air, Holmby Hills, Brentwood, and nearby estate neighborhoods within the same search.

FAQs

Does Measure ULA apply to homes located in Beverly Hills?

No. A property located within the incorporated City of Beverly Hills is outside the jurisdiction of Measure ULA. Properties with a Beverly Hills ZIP Code that sit within the City of Los Angeles remain subject to Measure ULA, most notably, homes within Beverly Hills Post Office. Before any transaction, always confirm legal jurisdiction.

Does the buyer pay the LA mansion tax?

Measure ULA is generally treated as a seller-side transfer tax, although transaction terms can always be negotiated. Buyers are affected indirectly because sellers often evaluate offers based on their expected net proceeds after taxes and other closing costs.

Does Measure ULA only apply to residential properties?

No. Measure ULA actually applies to high-value real estate sales within Los Angeles city limits exceeding $5.4 million on residential, commercial, industrial, and multi-family properties, as well as vacant land.

Discover More of Beverly Hills' Luxurious Lifestyle with Jade Mills

When I compare luxury properties for a client, I look well beyond asking price. Municipal boundaries, transfer taxes, development regulations, insurance considerations, and future ownership costs can all influence the real economics of the purchase.

Beverly Hills' exemption from Measure ULA is one such distinction. It does not automatically make one home a better purchase than another, but at the $10 million, $20 million, or $50 million level, the financial difference can be too large to ignore.

If you're a buyer or seller exploring a potential transaction in Beverly Hills, Bel Air, or the surrounding Los Angeles ultra-luxury market and want a better understanding of how location, transaction costs, and negotiating strategy can influence the true value of an exceptional property, contact me, Jade Mills, today. I would love the opportunity to help you navigate Beverly Hills' luxury real estate market and fulfill your current and long-term real estate goals.

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