The City of Los Angeles ULA Tax—a new city tax on certain real estate transactions, commonly referred to as the "mansion tax"—may be invalidated through the November 2024 election.

Los Angeles voters famously passed the "mansion tax" by ballot initiative in 2022. The measure increased transaction taxes on transfers of real estate in the City of Los Angeles from 0.56% of the price of the property, less any transferred debt, to up to 6.06% of the price, regardless of debt transfer. The tax applies to all asset classes, not only large single-family homes as its "mansion tax" moniker suggests. Mayer Brown analyzed the ULA Tax in an article published shortly after its adoption.

The ULA Tax has thus far withstood challenge in court, including a claim that the ULA Tax is a form of constitutionally prohibited "special tax."1 In Howard Jarvis Taxpayers Association , et al. vs City of Los Angeles, et al., plaintiffs argued that the ULA Tax is prohibited by XIII A of the California Constitution, which states that cities may only adopt special taxes by a two-thirds vote, and, further, that cities may not impose "a transaction tax or sales tax on the sale of real property." The court held that this restriction on cities did not apply to citizen initiatives, and dismissed the claim. The dismissal has been appealed.

However, in November 2024, all California residents will have the opportunity to vote whether to adopt a comprehensive constitutional amendment limiting tax increases, with retroactive effect. The Taxpayer Protection and Government Accountability Act (the "Taxpayer Protection Act"), a statewide ballot initiative, seeks to amend the California Constitution to establish uniform limits on state and local taxes.2

As pertinent to the ULA Tax, the Taxpayer Protection Act increases the difficulty of passing local special taxes. The Taxpayer Protection Act, if enacted, would define a "special tax" broadly as "any tax imposed for specific purposes," and require that any local special taxes be approved by a two-thirds vote of the electorate (rather than a simple majority).3 Because the ULA Tax was passed specifically to "fund affordable housing and tenant assistance programs," it likely qualifies as a special tax subject to supermajority vote.4

Importantly, the Taxpayer Protection Act additionally voids any local special tax adopted after January 1, 2022, unless re-adopted in accordance with the new supermajority requirement.5 These local special taxes would be voided 12 months after the effective date of the Taxpayer Protection Act. Because the ULA Tax passed in November 2022 with 57.77% of votes, it would require re-adoption at a higher passage rate within the 12-month period or else be effectively repealed.6

Governor Gavin Newsom and the state legislature have filed a challenge in the California Supreme Court attempting to disqualify the Taxpayer Protection Act from the November ballot, arguing that (a) the Taxpayer Protection Act is an unconstitutional revision of the California Constitution by voter initiative, and (b) the Taxpayer Protection Act would impair essential government functions. This litigation is pending.7


1. 'Mansion tax' prevails in court with judge dismissing lawsuit - Los Angeles Times (

2. Eligible Statewide Initiative and Referendum Measures :: California Secretary of State

3. 21-0042A1 (Taxes).pdf (

4. Initiative_Ordinance_ULA.pdf (

5. 21-0042A1 (Taxes).pdf (

6. Election Results (

7. - 020924.pdf

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