The short answer: Proposition TE, on the City of Los Angeles ballot on November 3, 2026, would give a one-time exemption from Measure ULA (the city's "mansion tax") to residential properties damaged or destroyed in the January 2025 Palisades Fire, when they are sold by the person who owned them on the day the fire started, through January 6, 2030. It matters only for sales above the ULA threshold, currently $5.4 million, where the tax is 4% or 5.5% of the price. It would also allow refunds for qualifying owners who already paid, and it needs a simple majority to pass.
As of October 17, 2026. This article explains the measure; it does not recommend a vote.
What is Measure ULA, and how much is it today?
Voters approved Measure ULA in 2022. It is an extra transfer tax on sales of real estate in the City of Los Angeles above a value threshold, and the money goes to the House LA Fund for affordable housing and tenant assistance. The thresholds adjust every year for inflation.
According to the LA Office of Finance, for sales closing after June 30, 2026:
- $5.4 million or less: no ULA tax (the city's regular 0.45% transfer tax still applies)
- Over $5.4 million and under $10.9 million: 4% ULA tax, or 4.45% combined with the regular tax
- $10.9 million or more: 5.5% ULA tax, or 5.95% combined
One detail many sellers miss: ULA is figured on the gross value of the sale, and the rate applies to the entire price, not just the part above the threshold.
City of LA transfer tax by sale price (sales closing after June 30, 2026)
A hypothetical, for scale: a qualifying lot or damaged home that sells for $6 million would owe $240,000 in ULA tax (4% of $6 million) under current rules. Under Prop TE, a qualifying seller would not owe that ULA amount. The regular city transfer tax would still apply.
What exactly would Prop TE change?
Per the City's official Voter Information Pamphlet, Prop TE would:
- Exempt sales of residential properties damaged or destroyed in the Palisades Fire from the ULA tax.
- Apply only when the seller is the owner on January 7, 2025, the day the fire started.
- Cover sales from January 7, 2025 through January 6, 2030 (five years from the fire).
- Allow refunds of ULA tax already paid on qualifying sales.
It does not repeal or change ULA for anyone else. Buyers who later resell those properties would be back under the normal rules. The Chief Legislative Analyst's summary notes the fire damaged or destroyed about 5,620 structures, roughly 5,495 of them residential.
Who would qualify, and who wouldn't?
Would this sale qualify for the Prop TE exemption?
| Qualifies? | |
|---|---|
| Fire-damaged Palisades home, sold by the Jan. 7, 2025 owner, before Jan. 7, 2030 | Yes if over the ULA threshold |
| Same owner, sale already closed and ULA paid | Yes refund allowed |
| Home bought after the fire, then resold | No |
| Sale of $5.4M or less | No ULA owed either way |
| Commercial property in the burn area | No residential only |
| Home outside City of LA limits | ULA does not apply there |
ULA is a City of Los Angeles tax, so it doesn't apply to properties in other cities or unincorporated areas. Whether a particular parcel "was damaged or destroyed" and how the exemption is claimed would be handled by the city if the measure passes, so confirm with the Office of Finance and your escrow officer before you count on it.
What do supporters and critics say?
Supporters (the ballot argument is signed by Mayor Karen Bass, Council President Marqueece Harris-Dawson, Councilmember Traci Park, whose district includes the Palisades, and others, including state legislators and building-trades and Palisades community leaders) argue that ULA "was never intended to penalize survivors who lost everything in a declared disaster," that many owners are selling because they have to, and that the exemption is narrow, temporary, and leaves ULA in place.
Critics and concerns: No official argument against Prop TE was filed with the City Clerk. When the City Council voted 13–1 to place it on the ballot, Councilmember Eunisses Hernandez voted no, arguing the exemption should have been limited to people whose primary residence burned and who need help rebuilding, rather than also covering LLCs, investors, and owners of several properties. The City Administrative Officer estimates Prop TE would reduce House LA Fund revenue by $35 million to $66 million through January 2030, money that would otherwise go to affordable housing and tenant assistance. It would not affect the city's General Fund.
If I own a damaged property, what should I do before November 3?
- Don't rush a closing just because of the vote. If Prop TE passes, it reaches back to sales since January 7, 2025 and allows refunds, so a sale that closes before or after the election would be treated the same way.
- Keep records showing you owned the property on January 7, 2025 and of the damage (insurance claim, county damage inspection).
- Run both scenarios with your CPA: selling now versus rebuilding and staying. Rebuilding generally keeps your Prop 13 base for the land; I walk through that trade-off in Buy, Remodel, or Tear Down and Rebuild?.
- If you sell and buy elsewhere in California, Prop 19 lets wildfire victims transfer their property-tax base year value to a replacement home anywhere in the state, bought within two years of the sale, up to three times (California BOE). That can matter as much as the transfer tax.
Outside California? If you have family in the Palisades or own a property there from out of state, the same rules apply to the property; ULA and Prop TE depend on where the property is, not where the owner lives.
Derek\'s take
After 20 years and more than 1,200 loans across California, I've watched a lot of families make big decisions under pressure, and a fire is about as much pressure as it gets. Prop TE is a decision for voters, and I'm not going to tell you how to vote. What I can do is help you see your numbers clearly: what a sale would net you under either outcome, what a rebuild would take to finance, and how Prop 19 could carry your tax base to your next home. If that would help, book a call with me. Thirty minutes, no credit pull, no obligation.
Frequently asked questions
When is the vote on Prop TE?
Tuesday, November 3, 2026, in the City of Los Angeles General Municipal Election. It passes with a simple majority.
Does Prop TE repeal the mansion tax?
No. ULA stays in place for every other sale. Prop TE only exempts qualifying fire-damaged residential properties sold by their January 7, 2025 owners through January 6, 2030.
I already sold my burned lot and paid ULA. Could I get it back?
If Prop TE passes and your sale qualifies, the measure allows a refund of ULA tax already paid. The city would set the claim process.
Does it cover the Eaton Fire or homes outside the city?
No. It applies only to the Palisades Fire, and ULA itself applies only within City of Los Angeles limits.
If I buy a fire-damaged lot, do I benefit?
Not as a buyer. The exemption applies to the sale by the owner as of January 7, 2025. If you later resell, normal ULA rules apply.
This article is general education, not tax, legal, or voting advice. Figures are as of October 17, 2026 and are re-checked on the day of publication. The $6 million example is hypothetical.
Sources
- City of Los Angeles, Voter Information Pamphlet, General Municipal Election, November 3, 2026 (Proposition TE)
- City of Los Angeles Office of Finance, Measure ULA FAQ
- California State Board of Equalization, Proposition 19
- LAist, "LA voters will decide if Palisades homeowners get a break from city's 'mansion tax'" (August 4, 2026)
- LAist, "Los Angeles Proposition TE: What to know about suspending the 'mansion tax' for fire victims" (October 2, 2026, updated October 14)
This article is general education, not a commitment to lend, an offer of credit, or tax, legal or investment advice. All loans are subject to credit approval, income and asset verification, and property appraisal. Programs, rates, terms and limits change without notice; figures are current as of the publish date. Derek Shao, NMLS #242117, CA DRE #01358261. Financial Dynamics, Inc. DBA Emory Financial, Company NMLS #393986. Equal Housing Opportunity.
