Your guide to Proposition TE: Exempting fire victims from the ‘mansion tax’

Many changes were proposed this election cycle to Measure ULA — the so-called ‘mansion tax’ that levies a fee on property sales above $5.4 million to raise money for housing and homeless initiatives — but only one made it to the ballot. Proposition TE seeks to exempt Palisades fire victims from paying the tax if they sell their home within five years of the disaster.

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Oct. 1, 2026

Measure ULA, which took effect in 2023, levies a 4% transfer tax on all L.A. property sales above $5.4 million and a 5.5% tax on sales above $10.9 million. Under current rules, if a Pacific Palisades resident who lost their home in the fire sold the vacant lot for, say, $6 million, they would owe $240,000 in transfer taxes.

Proposition TE would grant a one-time exemption to that tax, offered only to homeowners in Pacific Palisades selling properties that were damaged or destroyed by the Palisades fire. The exemption would last until Jan. 6, 2030 — five years from the date of the fire — and could retroactively be applied for refunds if a resident already sold their property and paid the tax. It applies to all residential properties, whether or not their owners lived there.

Advocates argue that fire victims already have been through enough, and paying the tax as a result of selling a house that’s been destroyed is unfair.

The ballot measure was approved by 13 of the 15 L.A. City Council members. Councilmember Traci Park, who led the initiative, called it the “least we can do as the community continues to recover,” adding that many are forced to sell because of lack of insurance or rebuilding costs.

“They’re not selling to profit. They’re not selling because they want to. They’re selling because they’ve already lost everything and there’s nothing left,” Park said in a July meeting.

Critics argue that the exemption is too broad and should have included only victims whose primary residence was destroyed as opposed to landlords or investors with portfolios of properties.

Councilmember Eunisses Hernandez, the only council member who voted against putting the measure on the ballot, called it a “loophole for the ultrawealthy” and said any exemption should favor lower-income victims such as tenants who lost rentals or laborers who lost work.

“When wealthy property owners need relief, we’re willing to bend over backwards … to meet their needs and desires. But when working-class people need protections, suddenly our hands are tied,” she said at a meeting in July.

Others are hesitant to stop any funds from flowing into Measure ULA, which raises funding for housing initiatives in the midst of a housing crisis. The exemption could reduce ULA revenue by 6% per year, or $32 million annually, according to the L.A. Housing Department.

Proposition TE was spearheaded by Park, whose district includes Pacific Palisades. As fire victims navigate insurance gaps and expensive rebuilding costs, the exemption was proposed as a way to give them more flexibility should they choose to sell their homes.