Groups File Suit Against Los Angeles’s Property Transfer Tax for Affordable Housing

An apartment complex in downtown Los Angeles at Eighth street and Grand avenue in Los Angeles, Calif., on Aug. 6, 2020. Kent Nishimura/Los Angeles Times/TNS

A taxpayer rights nonprofit and a landlord advocacy group has filed a lawsuit to block a new real estate tax placed on large property sales to fund affordable housing and homeless services in Los Angeles.

Initiative Ordinance ULA proposed enacting a 4 percent property sales tax on properties that are sold or transferred for more than $5 million. The tax increases to 5.5 percent on transactions exceeding $10 million.