The U.S. 9th Circuit Court of Appeals has agreed to hear a challenge to Measure ULA, a November 2022 ballot initiative in Los Angeles that would tax the sale of luxury real estate to fund affordable housing that has fallen short of targets.
As Breitbart News reported in early 2023, the ULA bill would have required the city to “impose a 4% tax on sales over $5 million and a 5.5% tax on real estate sales over $10 million,” which would have brought in $900 million in annual revenue.
So far, the ULA bill has only raised $252.9 million, according to the city comptroller therealdeal.com. ReportsOne problem is that wealthy homeowners rushed to sell before the tax took effect last April. High interest rates have also hurt.
There are currently several legal challenges to the ULA bill. The Howard Jarvis Taxpayers Association (HJTA) argues that the bill is unconstitutional because it expands cities’ taxing powers in violation of California’s Proposition 13.
A Los Angeles County judge dismissed HJTA’s lawsuit last year, but the attractiveA ballot measure requiring a two-thirds majority to raise taxes would also be on the statewide ballot in 2024, putting Measure ULA, which passed with 57.7% approval, back on the ballot. The measure is currently before the state Supreme Court.
A federal civil rights lawsuit filed by New Castle Courtyard was dismissed by a district court for lack of state tax jurisdiction. New Castle argues that supporters of the ULA bill misrepresented the bill as a tax on millionaires and billionaires, ignoring the fact that people selling luxury properties may actually be in tough financial situations.
The case is Newcastle Courtyards LLC et al. v. City of Los Angeles, case number 2:2023-cv-00104.
