The Hollywood Hills Price Band the Mansion Tax Emptied Out
Chris Evans listed his Hollywood Hills home at 7840 Torreyson Drive for $7 million in May 2025. He took it off the market that November and brought it back in June 2026 at $6.4 million. It closed at the end of August for $5.385 million. That is $15,000 under $5.4 million, the line where the City of Los Angeles transfer tax rate goes from 0.45% to 4.45% on every dollar of the sale.
The public record doesn't say whether the tax shaped the final number. The arithmetic shows how much it was worth. At $5.385 million, the city's base transfer tax comes to about $24,000. At $5.41 million, the bill would have been about $240,000. In this part of the Hollywood Hills, the asking price is only part of what decides a sale. The other part is where the price lands relative to the line.
Measure ULA, the city's "mansion tax," sits on top of a 0.45% base transfer tax. For transactions closing after June 30, 2026, the city's Office of Finance charges an extra 4% on sales over $5.4 million and under $10.9 million, and 5.5% at $10.9 million and above. The thresholds are adjusted every year using the Bureau of Labor Statistics Chained Consumer Price Index. As recently as June, the Los Angeles Times was reporting the lines at $5.3 million and $10.6 million.
That annual reset is what makes the Torreyson closing worth a close look. Under last year's $5.3 million threshold, a $5.385 million sale would have owed the 4% ULA layer, about $215,000 on its own. Under the threshold in place when it actually closed, it owed nothing beyond the base tax.
The tax is a cliff, not a ramp. Once a sale crosses the line, the higher rate applies to the full price, not just the amount above the threshold. Here is how the city's published rates work out at prices around the two lines:
| Sale price | Combined city rate | Approximate city transfer tax |
|---|---|---|
| $5,385,000 | 0.45% | $24,000 |
| $5,410,000 | 4.45% | $241,000 |
| $10,850,000 | 4.45% | $483,000 |
| $10,900,000 | 5.95% | $649,000 |
Going $25,000 over the first line adds about $217,000 in tax. Going $50,000 higher near the second line adds about $166,000.
The tax also survived a serious challenge this year. The Howard Jarvis Taxpayers Association had organized a measure to cap transfer taxes at 0.11%, which could have overturned ULA. In June, the association struck a deal with state lawmakers to put a different amendment on the ballot. That amendment raises the voter threshold for special taxes to two-thirds but leaves existing taxes such as Measure ULA in place. Anyone pricing a Hollywood Hills home this fall is pricing it with ULA in force.
If the seller bears the tax, which is the assumption the academic research uses, the cliff creates a range of prices above the line where a higher sale leaves the seller with less money.
A seller who closes at exactly $5.4 million pays the base tax of about $24,300 and keeps roughly $5,375,700 before other costs. Above the line, the seller keeps 95.55% of the price. To net the same $5,375,700 above the line, the home has to sell for about $5.63 million. Any sale between $5.4 million and roughly $5.63 million leaves that seller worse off than a sale at $5.4 million. Commissions and other closing costs move the exact figure, but the size of the gap holds.
Researchers have found this pattern in the city's sales records. A UCLA Lewis Center and RAND study published in April 2025 looked at City of Los Angeles sales between $4 million and $6 million, using transactions from July 2020 through March 2025. After ULA took effect, a spike appeared immediately below the original $5 million threshold, roughly three times the pre-ULA share of sales at that price. A second large spike appeared at $4.8 million, which the authors identify as the price where a seller who absorbs the full tax at $5 million comes out even. The authors called this "clear evidence that both parties understand they are better off transacting at prices that avoid the tax."
Volume fell as well. In the first nine months after ULA took effect, the same study estimated that City of Los Angeles sales over $5 million fell about 65%, from roughly 80 a month to roughly 30. In the other Los Angeles County jurisdictions, the drop was about 36%. A July 2026 report from the Pepperdine School of Public Policy and Beacon Economics, supported by the Greater Los Angeles Association of Realtors, also found clustering immediately below the ULA thresholds. It estimated that high-value transactions fell about 41% compared with similar jurisdictions.
One caution applies. As of early October 2026, no published study has measured sales around the new $5.4 million line, because it has only been in effect since July. The Torreyson sale is one data point that lands right where the earlier research says sales cluster.
Once a home is priced well above the dead zone, the tax doesn't go away. It becomes a fixed share of every price the seller considers. Two Hollywood Hills closings in September show what that looks like.
At 9265 Robin Drive in the Bird Streets, Casey Wasserman first asked $32.5 million, or $2,907 a square foot, in September 2025. After several price cuts, the last ask was just under $25 million. The home sold this September for $18.5 million, or $1,655 a square foot. Wasserman had paid $23.6 million in 2020. At the 5.95% combined rate, the city transfer tax on that price comes to about $1.1 million.
A week later, 1307 N. Doheny Drive sold for $14.2 million, or $1,452 a square foot. It's a 9,780-square-foot new build called "Five Fathoms," developed and sold by Nobel Homes. At the same rate, the tax comes to about $845,000. Further up the market, The Real Deal estimated about $1.9 million in ULA fees if Frank Binder's 1894 N. Stanley Avenue home sells at its $35 million asking price.
At these prices, the tax creates a mismatch that shows up in negotiations. An agent covering Sherman Oaks and Studio City told The Real Deal in July that sellers want to build the transfer tax into their price, but "buyers generally do not assign additional value to a property simply because the seller has a substantial ULA obligation." When a seller's number includes a tax bill the buyer won't pay for, the result is the pattern in the Robin Drive record: a high opening ask followed by several cuts.
Some owners are choosing not to sell at all. The same July report cited ATTOM data showing a 46% increase in City of Los Angeles remodel permits for high-priced single-family homes in the two years after ULA took effect, compared with 2018 and 2019. Mid-priced homes showed no statistically significant change. A builder in that story described a Brentwood family who decided to remodel instead of sell after working out that the tax plus agent commissions would have taken about 11% of their proceeds. Every owner who renovates instead of listing is one fewer home on the market above the line.
The tax hits value-add buyers twice: once in what they can buy below the line, and again in what they can sell above it.
1754 N. Sunset Plaza Drive is listed at $4.4 million, or $395 a square foot. Wells Fargo took over the property in August, and the city placed a $73,632 lien on it in July for fencing, cleaning, demolition and related costs. The listing broker told The Real Deal that fixing the damage and issues such as termites and mold will take "a few million dollars," and that in perfect condition the home could sell somewhere in the high-$8 million range. Buyer tours are scheduled for Oct. 10.
Run the city's rates on both ends of that plan:
The same broker described the current market as "declining" and said rising interest rates had "turned into a buyer's market overnight." For a renovation plan, the exit tax is a fixed cost, and it should go into the budget at the same stage as the construction estimate.
The cliff only applies inside the City of Los Angeles. The tax covers documents that convey property within city limits. For a parcel that sits partly inside the city, it applies in proportion to the share of value or square footage inside the boundary. A "Hollywood Hills" label on a listing doesn't settle the question. The jurisdiction of the specific address does.
For a buyer comparing hillside homes this fall, the threshold gives a few things to check before reading too much into any single comp:
Torreyson Drive is the clearest current example. It is a renovated 1940s house of about 4,600 square feet on three-quarters of an acre, overlooking Mulholland and Laurel canyons. It closed at about $1,170 a square foot, with $15,000 between its price and the 4% ULA rate.
If you're weighing a Hollywood Hills purchase or sale near the $5.4 million or $10.9 million line, run the tax math before the first offer. High-End Estates can model your net proceeds on both sides of the threshold, confirm which jurisdiction the parcel falls under, and structure negotiations accordingly. Request Private Access: call or WhatsApp Rajaa for a confidential consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
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