A Santa Monica home that sells for $7,999,999 owes roughly $56,800 in combined city and county transfer tax. At $8,000,000, one dollar more, the bill is $456,800. Ten minutes east in Brentwood, a sale crosses the same kind of line much earlier, at $5.4 million. If you are comparing a Westside luxury home in the $5 million to $10 million range across city limits, the seven-figure question is often which city's transfer tax schedule the price falls under, more than which neighborhood the home is in.
The two systems look similar from a distance. Santa Monica and Los Angeles both put large voter-approved surcharges on high-value sales, and both apply the higher rate to the full sale price once a threshold is crossed, not just to the dollars above it. Because of that design, each city has a cliff, and each cliff leaves a gap above it where a sale nets the seller less than one just below the line. The cliffs sit at different prices, and the advantage between the two cities flips twice as you move up the price range.
The two schedules, price by price
In Santa Monica, the City's documentary and real property transfer tax page sets the city tax at $3 per $1,000 below $5 million, $6 per $1,000 from $5 million through $7,999,999.99, and $56 per $1,000 at $8 million or more. The County's $0.55 per $500 is added on top. The middle tier comes from Measure SM, approved in 2020 and in effect since March 1, 2021. The top tier comes from Measure GS, approved in November 2022 and in effect since March 1, 2023.
In the City of Los Angeles, which covers Brentwood's 90049 addresses and Pacific Palisades, part of Council District 11, the Office of Finance lists new Measure ULA thresholds for transactions closing after June 30, 2026. Sales above $5,400,000 and below $10,900,000 pay 4%, and sales of $10,900,000 or more pay 5.5%. Those rates sit on top of the City's 0.45% base tax, and the County's 0.11% applies here too.
Here is what those rates mean at specific prices. Each figure is the combined city and county tax calculated from the published rates:
| Sale price | Santa Monica | City of Los Angeles |
|---|---|---|
| $5,000,000 | $35,500 | $28,000 |
| $6,000,000 | $42,600 | $273,600 |
| $7,500,000 | $53,250 | $342,000 |
| $7,999,999 | about $56,800 | about $364,800 |
| $8,000,000 | $456,800 | $364,800 |
| $9,000,000 | $513,900 | $410,400 |
| $11,000,000 | $628,100 | $666,600 |
The table shows three separate markets. Below $5.4 million, the two cities are within a few thousand dollars of each other. From $5.4 million up to $8 million, a Santa Monica sale carries a small fraction of the Los Angeles bill, a gap of about $231,000 at $6 million. From $8 million up to $10.9 million, Santa Monica becomes the more expensive city to sell in. Above $10.9 million, Los Angeles is ahead again by a smaller margin.
Pepperdine's School of Public Policy and Beacon Economics put the Santa Monica rates in a July 2026 report at effective rates of about 0.41%, 0.71% and 5.71% for the three tiers. The report notes that Santa Monica's structure is "less aggressive at lower transaction tiers" than ULA, while GS "still creates a sharp increase in tax liability once the $8 million threshold is crossed."
The price band each city leaves empty
A cliff tax creates a band of prices just above each threshold where the seller nets less than they would have just below it. Suppose the seller carries the tax. A Santa Monica sale at $7,999,999 leaves about $7,943,200 after transfer tax. To net that much above the line, the price has to reach roughly $8.42 million. Any accepted offer between $8 million and about $8.42 million leaves the seller worse off than one a dollar under $8 million.
Los Angeles has the same gap at a lower price. A sale at exactly $5.4 million owes about $30,240. Just above it, the full-price 4% surcharge pushes the bill to about $246,000. A seller has to reach roughly $5.63 million to come out even. The city's second line at $10.9 million is gentler, because the rate only rises by 1.5 points. The break-even point there is around $11.07 million.
So the Westside has three price bands where sales rarely add up for the seller:
- City of Los Angeles, about $5.4 million to $5.63 million. This is the widest gap in dollar terms on the Brentwood and Palisades side of the line.
- Santa Monica, $8 million to about $8.42 million. No similar gap exists in Santa Monica at $5.4 million, and its own $5 million step adds only about $15,000.
- City of Los Angeles, $10.9 million to about $11.07 million. This is a narrower band, created by the smaller 1.5-point step.
A buyer with a $5.5 million budget faces different arithmetic on each side of the city line. In Santa Monica, $5.5 million is an ordinary price where list prices land without friction. In Brentwood, a $5.5 million sale owes about $250,800 and nets the seller about $120,000 less than a $5.4 million sale would, and that changes how far the seller will negotiate.
What the sales record shows after GS
The Pepperdine and Beacon team tested whether the theory shows up in actual sales. Using Chicago Title transaction data, they found Santa Monica sales above $4 million were spread fairly evenly in fiscal 2023, with "no obvious clustering around the applicable tax thresholds." After GS took effect, the pattern changed:
"In FY24, transaction activity appears increasingly concentrated below the applicable $8 million threshold, while sales activity above the threshold becomes substantially thinner."
The authors write that the remainder of Los Angeles County shows no such pattern over the same price ranges. Santa Monica's smaller number of sales makes the effect less pronounced than under ULA, but they call it "consistent with threshold avoidance behavior." Culver City makes a useful comparison. Its Measure RE charges higher rates only on the value above each threshold, and the same report found little evidence of lasting clustering there. That points to the full-price design as the cause, more than the tax rate itself. The report was funded by the Greater Los Angeles Association of Realtors and the Arthur N. Rupe Foundation. The authors state that they set the research design and conclusions independently.
As of February 2, 2026, City data reported by the Santa Monica Lookout showed GS had generated $79,339,200 in total. Of that, $20 million had gone to the school district, with another $10 million due after the GS year closed on February 28. The ballot language estimated $50 million a year.
One line moves every July. The other stays at $8 million.
The gap between the two cities is not fixed, and the reason is in the ordinance text. The Office of Finance says ULA thresholds adjust every year based on the Bureau of Labor Statistics Chained Consumer Price Index. That is how the lower line rose to $5.4 million for closings after June 30, 2026. Santa Monica's $5 million and $8 million thresholds are written as fixed dollar amounts, with no indexing.
As home values rise, more Santa Monica homes will reach $8 million without the threshold moving, while the Los Angeles thresholds rise with inflation. In practice, the Santa Monica window where a seller pays the low 0.71% rate and Los Angeles charges 4.56% narrows from the bottom each year, as the ULA line climbs toward Santa Monica's fixed $8 million.
What the November 3 ballot put before voters
Neither city's thresholds or rates were on the November 3 ballot. In Santa Monica, the County's final list of local measures shows five city measures. They are ES, a school parcel tax, plus GG, RR, VV and TT, which cover rent control, eviction rules and hotel taxes. None of them amends GS. A proposal to exempt multifamily sales from GS did not qualify for the 2024 ballot, according to the Lookout, and it does not appear on the 2026 list either. That report also says the City won the California Business Roundtable's lawsuit against the measure in Superior Court.
In Los Angeles, the transfer tax measure on the ballot was Proposition TE. It would create a one-time ULA exemption for residential property damaged or destroyed in the Palisades Fire and sold by the person who owned it on January 7, 2025. It does not change ULA's rate tiers, according to the City Clerk's voter pamphlet. A narrower council proposal to exempt new apartment buildings was shelved 14-0 in July, LAist reported. Statewide, CalMatters explains that Proposition 43 changes only the vote needed for future voter-proposed local special taxes and "does not apply retroactively to taxes such as the mansion tax."
Reading a Westside listing against the line
Because of these cliffs, a list price also tells you where the seller stands relative to the tax line. A few patterns are worth checking against the schedule above:
- Santa Monica listings priced just under $8 million. A seller here has a strong reason to hold that price instead of stretching above it, since an $8.1 million offer nets them less.
- Brentwood or Palisades homes in the $5.4 million to $5.63 million band. These prices put the seller in Los Angeles's gap above the line. Price movement down toward $5.4 million carries more weight than the dollar amount alone suggests.
- Cross-city comparisons between $8 million and $10.9 million. In this band, Santa Monica is the city with the larger transfer tax bill, which runs against what many buyers expect.
- Palisades fire-damaged parcels. If Proposition TE takes effect, its exemption depends on who owned the property on January 7, 2025, not on the parcel itself.
The County collects both the city and county portions, usually through the Recorder's Office when the deed is recorded. Santa Monica offers a limited exemption from its upper tiers for qualifying affordable housing transfers by nonprofits and community land trusts. This post is general information drawn from published rates, not legal, tax or financial advice. Before you set a price or sign a contract, confirm how these taxes apply to your sale with your attorney, CPA or escrow officer.
If you are pricing a home near one of these lines, or deciding which side of the Santa Monica city limit to buy on, Shelton Wilder can run the transfer tax numbers on your specific property and price. Schedule a private consultation with Shelton Wilder to find where your number falls on each city's schedule.
