Los Angeles voters will decide whether to exempt victims of the January 2025 Palisades Fire from the city’s controversial mansion tax if they sell their damaged or destroyed residential properties. Proposition TE asks the electorate to approve a one-time waiver from Measure ULA for homeowners whose properties are worth more than $5.4 million, laist.com reported.
Palisades Fire Property Tax Exemption Timeline
The path to Proposition TE began after the disaster struck the Pacific Palisades neighborhood. Here is how the measure developed from the initial fires to the upcoming ballot.
- January 7, 2025: The Palisades Fire begins, eventually destroying thousands of homes and leaving residents facing high rebuilding costs and complex insurance payout processes.
- July 2025: The Los Angeles City Council votes to advance Proposition TE to the November ballot, following advocacy from local representatives who argued that survivors should not face financial penalties for selling land they can no longer rebuild on.
- November 2025 Ballot: Voters weigh a one-time exemption from the City’s special documentary transfer tax for residential properties damaged or destroyed in the fire.
- January 6, 2030: The proposed five-year sunset date for the exemption window, concluding the period during which qualifying owners can utilize the waiver.
Proposition TE could reduce Measure ULA revenues
According to Los Angeles City Administrative Officer Matthew Szabo, Proposition TE could reduce Measure ULA revenues from $35 million to $66 million. For comparison, Measure ULA generated close to $548 million during the last fiscal year, laist.com reported.
Proponents of the exemption include Los Angeles Mayor Karen Bass, City Councilmember Traci Park, the Los Angeles / Orange Counties Building & Construction Trades Council, and the Pacific Palisades Community Council. Councilmember Park argued during the July council debate that constituents are selling properties simply because they lost everything.
Conversely, Councilmember Eunisses Hernandez voted against placing Proposition TE on the ballot, objecting to the lack of exclusions for corporate entities or property portfolios. Hernandez pointed out that the council declined to pass parallel eviction protections for workers who lost income due to the fires.
Frequently Asked Questions About Proposition TE
Who qualifies for the Proposition TE exemption?
The exemption applies exclusively to residential properties sold by the owner of record as of January 7, 2025, the day the Palisades Fire began. Eligible properties must have been damaged or destroyed in the fire and sold within five years of that date.
How much is the original Measure ULA tax for high-value real estate?
Measure ULA levies a 4% tax on real estate sales exceeding $5.4 million and a 5.5% tax on properties valued above $10.9 million. Proposition TE relieves qualifying fire victims from these specific percentage assessments upon the sale of their land.
What happens to the revenue collected under Measure ULA?
Funds raised by Measure ULA are allocated toward affordable housing, homelessness prevention programs, eviction defense, rent relief, and new apartment construction for low-income renters in Los Angeles.
Voters decide Proposition TE in November election
Voters cast their ballots on Proposition TE during the November election cycle. If approved, the measure establishes an exemption window running from January 7, 2025, through January 6, 2030, allowing qualifying sellers to claim either a one-off exemption or a refund on applicable transfer taxes.