An Encino home that sells for $5,450,000 leaves its seller about $168,000 less than one that sells for $5,400,000, once the City of Los Angeles collects its transfer taxes. The higher price triggers a 4% tax on the entire sale price, and the extra $50,000 doesn't come close to covering it. Encino is inside the City of Los Angeles, so any sale there above the threshold owes Measure ULA tax.
For transactions closing after June 30, 2026, the city's Office of Finance applies a 4% ULA tax to sales above $5,400,000 and below $10,900,000, and 5.5% to sales of $10,900,000 or more. That sits on top of the city's base transfer tax of 0.45%, so the combined rates are 4.45% and 5.95%. The ULA rate applies to the full consideration, not just the amount over the threshold. One dollar over $5.4 million adds about $216,000 in tax.
That structure creates a band of prices just above the line where a seller who carries the tax nets less than a seller who closes right at it. For anyone pricing an Encino home in the mid-$5 millions, where that band ends matters more than any comp.
Where the band ends
The table uses the city's published rates. The base tax is figured at $2.25 per $500 of value, and the ULA tax is figured as a flat percentage of the full price. These are illustrations of city transfer taxes only. They leave out commissions, county transfer tax, and every other closing cost, and they aren't tax advice.
| Sale price | City base tax | ULA tax | Proceeds after city transfer taxes |
|---|---|---|---|
| $5,399,000 | $24,296 | $0 | $5,374,704 |
| $5,400,000 | $24,300 | $0 | $5,375,700 |
| $5,450,000 | $24,525 | $218,000 | $5,207,475 |
| $5,550,000 | $24,975 | $222,000 | $5,303,025 |
| $5,630,000 | $25,335 | $225,200 | $5,379,465 |
| $6,800,000 | $30,600 | $272,000 | $6,497,400 |
The break-even sits at roughly $5.63 million. Any price between $5,400,001 and about $5,626,000 leaves the seller with less, after city transfer taxes, than a sale at exactly $5,400,000. That's a band of about $226,000 where a better offer is a worse outcome for the seller, unless the buyer and seller split the tax some other way in negotiation.
The band moves every year. The city adjusts ULA thresholds annually for inflation. The Real Deal reported in April that the adjustment follows the chained consumer price index and that the lines rose from $5.3 million and $10.6 million to the current $5.4 million and $10.9 million. An Encino pricing plan built around last year's line could put a home on the wrong side of this year's.
Two Encino sales on either side of the line
The clearest recent example closed in Rancho Estates. A home there first listed in May at $6.5 million and sold for $5.399 million, according to Robb Report's September 9, 2026 coverage. The Real Deal rounded the figure to $5.4 million and described the house as custom-built in 1989 for Tom Petty on a nearly 1-acre lot, since expanded to about 11,400 square feet.
That reported price lands $1,000 under the threshold. Neither report says why the price ended up where it did, and nothing published ties it to the tax. The arithmetic still applies. At $5.399 million, the sale owes no ULA tax under the city's published rates. At $5.4 million plus one dollar, it would have owed about $216,000 more.
The other example closed before the current thresholds took effect. An Encino home sold in April for $6.8 million, after first listing in June 2024 at nearly $12 million and a March cut to just under $7 million, The Real Deal reported. The house has more than 14,000 square feet on a little over an acre, with a recording studio, tennis court, and guest house. At $6.8 million, the sale was well past both the old line and the new one. Under the current 4% rate, that price works out to $272,000 in ULA tax before the base tax.
The same report named 4525 Woodley Avenue, sold in January for $16.4 million, as Encino's top residential sale of 2026 to that point. At that level the 5.5% tier applies. For a home far above either line, the tax is a large cost, but it doesn't change how the home is priced the way it does for a home sitting near $5.4 million.
Why buyers don't close the gap
A seller sitting just above the line might hope a buyer will make up the difference. The brokers The Real Deal interviewed in July describe a different negotiation. Sellers want the price to cover their tax bill, and a broker who works in Sherman Oaks and Studio City told the outlet that buyers generally don't value a property any higher because the seller owes a large ULA bill. The same broker said ULA now comes up in nearly every serious conversation about timing, pricing, and renovation.
That puts pressure on prices in both directions. Homes that could sell in the low-to-mid $5 millions have a reason to settle at or below $5.4 million. Homes worth clearly more than $5.63 million carry the full tax, and a buyer has little reason to treat that as the buyer's problem.
The owners who stay and rebuild
When the math above the line doesn't work, some owners don't sell. Oren Levy of Gesh Group, a luxury homebuilder that also remodels existing homes, told The Real Deal his firm's work was about 80% new development and 20% remodels before ULA. Since then it has flipped to about 60% remodels and 40% new builds, and the renovations often strip a house to the studs. His firm's high-end remodels usually cost $1 million to $6 million on homes that would sell above the threshold, and many are in Sherman Oaks, Encino, Bel Air, and Brentwood. He described Brentwood homeowners who had planned to sell, then figured the tax plus commissions would take about 11% of their proceeds and put that money into their current home.
Research from UCLA Anderson, published in February 2026, found the same pattern across the city. Luxury-home renovation permits rose 46% after ULA, while permits for new luxury single-family construction ran 15% to 19% below those for mid- and lower-priced homes. For Encino buyers, that means fewer upper-tier homes listed for sale while more of them are being renovated by owners who plan to stay.
What the citywide numbers show, and their limits
A July 2026 report from Pepperdine and Beacon Economics found visible clustering of sales just below the ULA thresholds. It estimated that monthly high-value transactions in Los Angeles fell about 41% relative to surrounding jurisdictions, with no statistically significant effect below the threshold. It also estimated that single-family homes selling for $5 million and up in the city underperformed comparable homes in neighboring jurisdictions by about 11% to 12%. The report discloses support from the Greater Los Angeles Association of Realtors and the Arthur N. Rupe Foundation. It also notes that its method can't separate sales that repriced below the line from sales that were delayed or never happened.
UCLA Lewis Center researchers had earlier estimated a 49% to 55% drop in above-threshold transactions during ULA's first 20 months, with the largest effect outside single-family homes. Researchers don't all agree. LAist reported in May 2026 that a city review of seven studies found three concluding ULA suppressed housing production and four finding no meaningful negative effect.
None of these studies counts Encino sales separately, and no public Encino-only figures for July through September 2026 turned up in our research. The neighborhood evidence is the transaction record above plus the builder activity Levy describes.
What's settled heading into November
ULA's direct legal challenge is over. The state Court of Appeal upheld the measure in December 2025. The city's defense counsel reported in June 2026 that the California Supreme Court had denied review. The Howard Jarvis Taxpayers Association dropped its planned statewide repeal initiative after a deal in Sacramento. On July 2, 2026, the City Council set aside a proposed 10-year exemption for new multifamily and mixed-use buildings.
For an Encino sale closing this fall or winter, the $5.4 million and $10.9 million lines and the 4% and 5.5% rates are the working numbers.
Quick answers
Does ULA apply to Encino condos and townhomes? Yes, if the sale price clears the threshold. The city's transfer tax applies to any document that conveys real property within Los Angeles.
Does Proposition 43 change ULA? No. The statewide measure raises the vote threshold for voter-sponsored local special taxes approved after January 1, 2027, and doesn't apply to ULA, which already exists.
What is Proposition TE? It's a city measure on the November 3, 2026 ballot. It would give a one-time ULA exemption or refund for qualifying residential properties damaged in the Palisades Fire and sold by the owner of record between January 7, 2025 and January 6, 2030. It doesn't cover ordinary Encino sales.
Is a sale at exactly $5,400,000 taxed? The Office of Finance applies the 4% rate to sales greater than $5,400,000, so a sale at exactly that figure owes only the 0.45% base tax. Confirm the treatment of your own transaction with a tax professional before setting a price.
If your Encino home could sell anywhere between the high $4 millions and the low $6 millions, the price strategy starts with where your home falls relative to that $226,000 band. Angelo Fierro Group can model your proceeds on both sides of the line, prepare the home with Compass Concierge, and test pricing quietly through Compass Private Exclusives before anything goes public. Start Your White‑Glove Consultation.
