Transfer taxes are a quiet but important line item in every Los Angeles closing. If you are selling in Mid‑Wilshire, these taxes affect your net proceeds, your pricing strategy, and even how you negotiate credits. This guide breaks down what they are, when they apply, who typically pays, and how to plan your sale with confidence.
What LA Transfer Taxes Mean for Sellers
Why they matter to your bottom line
Transfer taxes are collected when the deed records. In Los Angeles, there are usually two layers at closing: a county tax and a city tax. On higher price points, an added city surcharge can apply. Together, these can add up to a meaningful number, so planning for them early helps you price smart and avoid surprises.
How this plays out in Mid‑Wilshire
Mid‑Wilshire sits inside the City of Los Angeles, which means both Los Angeles County and City of Los Angeles rules apply to typical home sales in the neighborhood as defined by the city’s boundaries. Most sellers will see both the county’s documentary transfer tax and the city’s real property transfer tax on their closing statements.
What you will learn here
We will cover the layers of transfer tax you may see, when they are collected, how costs are usually allocated, what counts as taxable consideration, common exemptions, and how to build a clean, accurate net sheet. We will also connect these points to Mid‑Wilshire pricing and offer strategy so you can protect your proceeds.
Los Angeles Transfer Tax Basics
County and City components
A Mid‑Wilshire sale generally triggers:
- Los Angeles County documentary transfer tax, collected by the County Recorder when the deed records per the Recorder’s guidance.
- City of Los Angeles real property transfer tax, administered by the City’s Office of Finance. This includes a base city tax, and for properties above certain price tiers, an additional surcharge adopted by voters outlined by the City.
Price‑tier surcharges overview
Los Angeles also applies a price‑based surcharge on higher‑value transactions within city limits. The surcharge is separate from the city’s base tax and has its own calculation rules and thresholds. If you are near those price bands, confirm your exposure with escrow and your broker using the City’s current guidance from the Office of Finance.
When taxes are collected
Transfer taxes are calculated by escrow or title, declared on the deed, and collected by the County Recorder at the time of recording. If an exemption applies, the proper statement and citation must appear on the document per county recording procedure.
Who Pays and How It’s Calculated
Cost allocation and negotiation
Who pays which tax is a term of your purchase agreement. Local custom often has the seller paying the county tax and parties negotiating the city tax, but there is no statewide rule. The allocation can be agreed to in offers and counteroffers, and escrow will follow the contract. When in doubt, check current local practices and make it explicit in writing see industry custom notes.
Taxable consideration and adjustments
At a high level, transfer tax is based on the consideration exchanged for the property. Key points to understand:
- Consideration generally means the price paid. Certain components like assumed loans can be treated differently depending on the city or county rule set.
- The City calculates its base tax and its surcharge using different measures. For example, one may use a net value while the other applies to gross value. This matters if a buyer assumes debt or if there are complex credits per the City’s FAQs.
- Personal property that is clearly separate from the real estate is typically excluded when properly itemized. Your escrow officer will apply the official formulas, handle rounding rules where required, and place the declaration on the recorded instrument as the Recorder’s office describes.
Sample net sheet walkthrough
Here is a simplified example to show how transfer taxes flow through a seller’s net. Numbers are hypothetical and for illustration only.
- List price: $1,850,000
- Offer price: $1,825,000
- Agreed credits to buyer: $10,000
- Estimated county transfer tax: calculate per county formula at closing
- Estimated city transfer tax: calculate per city formula at closing
- Commission, staging, and prep costs: itemize per your listing agreement
- Property taxes and HOA prorations: adjust per close date
- Estimated seller net before mortgage payoff: Offer price minus credits, minus transfer taxes, minus other closing costs Your broker and escrow can create a live net sheet that updates as offers come in, so you know your proceeds if, for example, a buyer requests a price reduction vs. a credit.
Exemptions and Special Situations
Common exemptions sellers explore
Certain transfers may qualify for exemptions under state law, such as some gifts, trust transfers, and transfers between spouses in connection with divorce, as well as transfers to public agencies. If you think an exemption might apply, you will need to cite the correct statute and use accepted language on the deed see sample categories used by county recorders.
City surcharge exemptions
The City’s surcharge has its own exemption categories for specific buyers or transactions, including qualified nonprofit and affordable‑housing entities. Some exemptions require pre‑approval or certifications managed by the City’s Office of Finance and the LA Housing Department. Transactions exempt from the base city tax are generally exempt from the surcharge, but documentation is key per the City’s guidance.
Documentation escrow will request
To claim an exemption, escrow will ask for:
- Proper statutory citation and exemption wording on the deed
- Any City approvals or certifications for surcharge exemptions
- Supporting documents such as court orders, trust instruments, or nonprofit status letters Accuracy and timing matter. Missing or incomplete paperwork can delay recording or trigger a post‑closing invoice from the City or County as noted by the Office of Finance.
When to involve legal or tax advisors
If your sale involves a trust, nonprofit, divorce, gift, portfolio transfer, or 1031 exchange, consult your CPA or attorney early. They can help structure the transaction, confirm exemption eligibility, review timing around effective dates, and coordinate with escrow on the correct declarations.
Mid‑Wilshire Market and Strategy Impact
Neighborhood price bands and exposure
Mid‑Wilshire has a mix of price points. Many sales fall into ranges where only the county and base city tax apply, while luxury properties may trigger the city surcharge. If your target price is near a threshold, the way you structure price, credits, or personal property can influence tax exposure. Confirm where your likely sale price sits relative to current city guidance before you go live using the City’s FAQ page.
Condo vs. single‑family considerations
Condos, TICs, and single‑family homes can carry different price expectations and HOA or building requirements that affect your days on market, concessions, and final price. Since transfer taxes are price‑driven, your property type and positioning will shape your closing‑cost plan and negotiation approach.
Pricing, credits, and offer terms
- If you expect multiple offers, decide whether you prefer a clean price or are open to buyer credits. Both can land at the same net, but taxes typically follow the recorded consideration.
- If you are close to a surcharge threshold, talk with your broker and escrow before countering. Timing and calculation rules matter for contracts that cross month‑ or year‑end and for assumed loans that can change what is counted per City rules.
- Make tax allocation explicit in your counter. Do not rely on custom. Spell out who pays what and how any surcharge would be handled see industry practice overview.
Plan Your Sale With a Pro Team
Role of broker, escrow, and CPA
A smooth plan looks like this:
- Your broker builds preliminary net sheets at likely price points and flags where city surcharge exposure begins.
- Escrow verifies the correct city and county formulas, applies the rounding and calculation rules, and prepares the deed declarations for recording as the County requires.
- Your CPA reviews exemptions, capital gains, and any entity or trust considerations.
- Together, the team sets clear offer instructions about tax allocation, timelines, and needed documents.
Timeline and pre‑listing prep
- Gather trust, entity, divorce, or court documents early.
- If you plan to claim a city surcharge exemption, start the City process and confirm required approvals before going to market per the City’s guidance.
- Discuss closing date targets. For changes that take effect mid‑year, the timing of the transaction vs. recording can affect which rates apply, and proof of the actual transfer date may be needed see effective‑date notes.
Next Steps to Estimate Your Net
You can avoid last‑minute surprises by modeling your net proceeds now. Here is a simple plan:
- Review recent comps to set realistic price bands.
- Have your broker and escrow produce a net sheet at several prices, with and without buyer credits.
- Confirm whether only county and base city tax apply, or if the city surcharge would be triggered at your expected price using the Office of Finance FAQ and the Recorder’s resources for county collection mechanics here.
- Make tax allocation part of your counter strategy and listing disclosures.
When you are ready to run the numbers for your address, get a tailored net sheet and listing plan with Mark Gallandt. We will coordinate with escrow, confirm current city and county rules, and align pricing, credits, and timing to protect your net. Let’s Connect.
FAQs
Which transfer taxes apply to a Mid‑Wilshire sale?
- Most Mid‑Wilshire sales pay both the Los Angeles County documentary transfer tax and the City of Los Angeles real property transfer tax. Higher‑price sales within city limits may also owe the city’s surcharge under Measure ULA per City FAQs and County recording guidance.
When are transfer taxes collected and who calculates them?
- Escrow or title computes the taxes and places the declaration on the deed. The County Recorder collects them at recording according to the Recorder.
Who usually pays these taxes in Los Angeles?
- Payment is negotiable and set by the purchase contract. Local custom often has the seller paying county tax and the parties negotiating city taxes, but always write the allocation into your offer and counter see industry custom overview.
What are the current Los Angeles transfer tax rates?
- County DTT is computed per the Recorder’s published rate schedule here. The City’s base tax and the Measure ULA surcharge, including current thresholds and calculation rules, are posted by the City’s Office of Finance here.
Do exemptions exist for certain transfers?
- Yes. State law lists exemptions such as certain gifts, trust transfers, divorce‑related transfers, and transfers to public agencies. The City’s surcharge also has specific exemption categories for qualified organizations. Proper citations, approvals, and documents are required see sample county guidance and City FAQs.
How do effective dates and threshold changes affect my sale?
- The City updates surcharge thresholds and applies rules based on when the transaction occurs and records. If your closing is near a change, escrow may need evidence of the actual transfer date to apply the correct rate per City guidance.
What if we overpay or underpay at closing?
- The City can invoice for underpayments and offers a refund claim process for overpayments. Keep all escrow and recording documents to support any post‑closing corrections outlined by the Office of Finance.
