The short answer
California's county documentary transfer tax is 55 cents per $500 of value, about 0.11%, and a 1031 exchange does not exempt it. The large numbers come from charter cities. Los Angeles charges a base tax of $2.25 per $500 (0.45%) and, for transfers closing after June 30, 2026, Measure ULA adds 4% on conveyances above $5,400,000 and 5.5% at $10,900,000 or more, measured on the gross price including any loan assumed. San Francisco's graduated schedule tops out at 5.5% from $10 million and 6% at $25 million or more. Each is a tax on the document, not on the gain, so the exchange changes nothing; the seller's share is an exchange expense paid from the proceeds.
At a glance
| County tax | 55 cents for each $500 of value exclusive of liens remaining, under Revenue and Taxation Code section 11911 |
|---|---|
| General-law city add-on | One-half the county rate, credited against the county tax; charter cities set their own rates |
| Los Angeles base | $2.25 per $500 (0.45%) on the net value conveyed, exclusive of liens remaining |
| Measure ULA | 4% above $5,400,000 and 5.5% at $10,900,000 or more for transfers after June 30, 2026, on gross value |
| ULA thresholds | Adjusted every year; the prior year's thresholds were $5,300,000 and $10,600,000 |
| San Francisco top tiers | 5.5% from $10,000,000 to under $25,000,000 and 6% at $25,000,000 or more |
| Entity exemption | Section 11925: a change in the method of holding title with proportional interests unchanged is not taxed |
| Exchange exemption | None in the county statute, the Los Angeles ordinance or the San Francisco schedule |
Three layers: the county tax, the city tax and the special measures
The state statute is modest. Revenue and Taxation Code section 11911 lets a county tax each deed "at the rate of fifty-five cents ($0.55) for each five hundred dollars ($500) or fractional part thereof" of value above $100, exclusive of liens remaining on the property. A general-law city may add half that amount, which is credited against the county tax, so the combined rate in most of California is $1.10 per $1,000.
Charter cities are not bound by the half-rate rule and set their own. Los Angeles, San Francisco, Oakland, Berkeley, San Jose, Santa Monica and Culver City all levy city transfer taxes above the county figure, and several have added voter-approved tiers on high-value sales. The two largest are set out below; for any other city, the county recorder's fee schedule lists the city rate that applies to the parcel.
None of these ordinances looks at how the seller reports the sale for income tax. The taxable event is the recording of a deed for consideration, and a section 1031 exchange still records a deed on each leg. The state income tax side, including Form 593 withholding and the annual FTB 3840 report, is on 1031 exchange rules in California.
Los Angeles: 0.45% base plus Measure ULA at 4% or 5.5% on the whole price
The Office of Finance's Measure ULA FAQ states the components: "The Base Tax rate of $2.25 per $500 or part thereof" and the ULA rates of "4% for properties conveyed over $5,400,000, but under $10,900,000 and 5.5% for properties conveyed at $10,900,000 or more," the thresholds "effective for transactions closing after June 30, 2026." They are adjusted every year by the consumer price index, so a closing that slips past June 30 can land under a different threshold.
ULA is a cliff, not a marginal rate. The 4% applies to the entire consideration once the price crosses the threshold, and the FAQ confirms the base is different from the city's ordinary tax: "For the Base Tax, it is calculated based on net value of the property conveyed (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale.) For the ULA Tax, it is calculated based on gross value (including the value of any lien or encumbrance)." An assumed loan is excluded from one and included in the other.
Hypothetical: a $6,000,000 apartment building in Los Angeles sells inside an exchange with no loan assumed. County tax is $6,600, the city base tax $27,000 and ULA $240,000, a total of $273,600, about 4.6% of the price. The same building at $5,300,000 would owe no ULA at all. Run your own numbers with your CPA. The FAQ lists exemptions only for qualifying nonprofit and affordable housing transferees under sections 21.9.14 and 21.9.15 of the municipal code, so exchangers do not qualify.
San Francisco: a graduated schedule that reaches 6%, with a repeal-and-replace measure on the ballot
San Francisco's transfer tax rises by tier of consideration. The City Attorney's ballot summary for the November 2026 measure describes the current law: "The tax rate is 5.5% for properties with a sales price or value from $10,000,000 to under $25,000,000, and 6% for properties with a sales price or value of $25,000,000 or more." Lower tiers apply below $10 million; the Office of the Assessor-Recorder's schedule gives the exact figures for a given price.
The Controller's statement on Proposition I, dated August 10, 2026, explains that the measure would cut the general fund rates on those two tiers to 2.75% and 3% and impose a new tax at 2.75% and 3% dedicated to affordable housing, with an exemption for certain newly built multifamily housing. The seller's combined rate on a large sale would be close to unchanged if it passes; the point for an exchanger is that the top tiers are not going away.
Hypothetical: a $12,000,000 San Francisco office building sells inside an exchange in 2026. At 5.5% the transfer tax is $660,000 before the county's share. That is money that never reaches the qualified intermediary, and it has to be in the replacement model from the start; the arithmetic of equity, debt and reinvestment is on the 1031 exchange equation.
Why direct deeding, entity rules and reverse exchanges matter here
In a forward exchange the qualified intermediary is treated as acquiring and transferring the property without taking title, under Reg. section 1.1031(k)-1(g)(4)(iv), so each leg records one deed and pays one tax. A reverse exchange is different: the accommodation titleholder records a deed when it buys and another when it conveys to you, and in a ULA city the second deed on a property above the threshold is another 4% or 5.5% unless the city grants relief. Price that before choosing the structure; the mechanics are on the reverse 1031 exchange guide.
Section 11925 governs entities. A transfer of a partnership interest is not taxed where the partnership continues under section 708 of the Internal Revenue Code and keeps the realty, and subdivision (d) exempts a transfer that results "solely in a change in the method of holding title" where proportional ownership stays the same. A termination under section 708 is treated as a conveyance of all the partnership's realty at fair market value.
Those rules decide whether a pre-sale restructuring records a taxable event. Moving a property from co-owners into an LLC in the same proportions is exempt; buying out a partner so that ownership shifts is not, and in Los Angeles a deemed conveyance of a large building can carry ULA. The section 1031 side of the same restructurings is on drop-and-swap 1031 strategies.
Paying the city tax from exchange funds, and what it does to the budget
Transfer taxes are costs of transferring the property. Paid through escrow from the sale proceeds, they reduce the amount realized and do not create boot, as set out on closing costs paid from exchange funds. Custom in California puts the county tax on the seller and splits or allocates city taxes by local practice and contract, so the purchase agreement should state who pays which line.
The practical effect is on the replacement side. Equity that would have been reinvested goes to the city instead, and the debt replacement test is measured against the full relinquished price, not the price net of taxes. Form 593, the state's income tax withholding certificate that a section 1031 seller signs before escrow closes, is a separate filing covered on California Form 593 for a 1031 exchange.
- Los Angeles after June 30, 2026: 0.45% base on net value plus 4% above $5.4 million or 5.5% at $10.9 million on gross value.
- San Francisco: graduated, 5.5% from $10 million and 6% from $25 million; Proposition I on the November 2026 ballot would restructure, not remove, those tiers.
- Everywhere in California: county tax of $1.10 per $1,000 plus any charter city rate; no exemption for section 1031.
- Reverse exchanges: two deeds on the parked property, each potentially taxed.
Related questions
Is Measure ULA charged on the amount over the threshold or on the whole price?
On the whole price. Once the consideration exceeds $5,400,000 the 4% applies to all of it, and at $10,900,000 or more the 5.5% applies to all of it, measured on gross value including any assumed loan.
Who pays the Los Angeles transfer tax, buyer or seller?
The ordinance imposes it on the document and the city collects from either party at recording. Local custom and the purchase agreement allocate it, and the exchange cooperation clause should say so.
Does the ULA threshold change every year?
Yes. The Office of Finance adjusts the thresholds annually by the consumer price index, effective July 1. The $5,400,000 and $10,900,000 figures apply to transactions closing after June 30, 2026.
Can I avoid city transfer tax by selling my LLC interest instead of the building?
Section 11925 treats a termination of the partnership as a conveyance of its realty, and cities including Los Angeles and San Francisco tax changes in control of entities holding real property. Review the ordinance with counsel before relying on it.
Does buying a DST interest with the proceeds trigger California transfer tax?
No deed in your name records, so you pay no documentary transfer tax on the purchase. The trust paid it when it acquired the property, and that cost sits in the offering's load.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- California Revenue and Taxation Code section 11911, Documentary transfer tax
- California Revenue and Taxation Code section 11925, Partnerships and other entities
- Los Angeles Office of Finance, Real Property Transfer Tax and Measure ULA FAQ
- City and County of San Francisco, Title and Summary, Changes to Real Property Transfer Tax (November 2026 measure)
- San Francisco Office of the Controller, Proposition I, Changes to Real Property Transfer Tax (August 10, 2026)
- Reg. section 1.1031(k)-1, Treatment of deferred exchanges