Mayor Karen Bass of Los Angeles has unveiled the fiscal budget for 2023-2024, allocating the revenue generated from Measure ULA's newly implemented "Mansion Tax." The funds have been set aside to address potential legal disputes that may invalidate the tax entirely. Should the new tax be repealed, the City is prepared to issue refunds.

Effective April 1, 2023, Los Angeles County instituted a 4% documentary stamp tax on residential real estate transactions ranging from $5 million to $10 million. For transactions exceeding $10 million, a 5.5% tax rate applies. Consequently, a $20 million residential property sale in the county would be subject to a $1.1 million documentary stamp tax, in addition to other applicable fees and taxes. The revenue generated from Proposition ULA is earmarked for homelessness alleviation in the county.

Several oponents have questioned the legality of this tax. One argument posits that the California Constitution restricts local governments from levying documentary stamp taxes for specialized purposes. Another argument suggests that the tax contravenes the equal protection clauses of both the California and U.S. Constitutions. Although these challenges were submitted before the tax came into effect, no court has prohibited the county from collecting it. Should the tax be invalidated due to legal challenges, the city will be required to issue refunds.

Additionally, the "Taxpayer Protection and Government Accountability" Proposition has garnered sufficient signatures for inclusion in the November 2024 statewide ballot. This proposition mandates that any new or increased tax must receive approval from two-thirds of the voters. It would also nullify any tax propositions passed after January 1, 2022, that did not meet this criterion. Measure ULA, which received 58% approval, would be invalidated if the statewide proposition is enacted.

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