Measure TE Passes in Los Angeles: What Pacific Palisades Homeowners Need to Know About the New Mansion Tax Exemption

Homeowners affected by the January 2025 Palisades Fire may now qualify for significant tax relief when selling their properties, potentially saving hundreds of thousands of dollars.

Los Angeles voters approved Measure TE in the November 3, 2026 election, creating a one-time exemption from the city’s Measure ULA transfer tax for qualifying residential properties damaged or destroyed in the Palisades Fire.

For homeowners deciding whether to rebuild, sell a vacant lot, or move on from a fire-damaged property, this change could have a substantial financial impact.

But not every property affected by the fire will necessarily qualify.

Here’s what Pacific Palisades homeowners should know.

What Is Measure TE?

Measure TE provides a one-time exemption from Los Angeles’s Measure ULA, commonly known as the mansion tax, for qualifying residential properties damaged or destroyed in the January 2025 Palisades Fire.

Measure ULA imposes an additional transfer tax on higher-value real estate transactions within the City of Los Angeles. Depending on the sale price, the tax can be 4% or 5.5% of the property’s total taxable sale value.
For homeowners selling multimillion-dollar properties, that represents a significant expense.

Measure TE offers relief to eligible fire-affected homeowners who sell their properties during a five-year period beginning January 7, 2025, and ending January 6, 2030.

Importantly, Measure TE does not eliminate the mansion tax for all Los Angeles properties. It creates a targeted exemption for qualifying Palisades Fire properties.

How Much Could Homeowners Save?

The potential savings are substantial.

Consider a Pacific Palisades homeowner selling a qualifying property for $8 million.

Under the 4% Measure ULA rate, the seller would ordinarily face an additional $320,000 in transfer taxes.

With a Measure TE exemption, that additional tax could be eliminated.

Here are some examples using the applicable ULA rates and thresholds:

Illustrative calculations based on ULA rates of 4% and 5.5%. Actual tax liability depends on the applicable thresholds at the time of sale, transaction details, and eligibility.

For some homeowners, this relief could meaningfully change the financial decision between rebuilding and selling.

Do Vacant Lots Qualify for Measure TE?

Yes, qualifying vacant lots can potentially receive the exemption.

This is particularly important in Pacific Palisades, where many homeowners lost their houses entirely and are now deciding what to do with the land.

A parcel that is vacant because its residential structure was destroyed in the Palisades Fire may qualify for Measure TE, subject to the ordinance’s ownership, damage, transaction, and documentation requirements.

However, land that was already vacant before the fire should not automatically be assumed eligible.

Homeowners should confirm eligibility before listing or entering into escrow.

What About Homes That Suffered Smoke Damage?

This is one of the more important questions for homeowners whose properties survived the fire.

Some Pacific Palisades homes remained standing but experienced smoke infiltration, soot contamination, or other damage requiring remediation.

For example, imagine a homeowner spent $10,000 repainting the interior of a home following smoke exposure.

Would that property qualify for the Measure TE exemption?

Not necessarily.

The measure applies to residential properties damaged or destroyed by the Palisades Fire, but whether a particular level of smoke damage satisfies the ordinance requires a closer review.

Minor cosmetic repairs, repainting, or routine smoke remediation should not be assumed sufficient to establish eligibility.

The distinction between documented qualifying fire damage and relatively minor cosmetic damage may be critical.

Before relying on the exemption, homeowners should obtain appropriate documentation and confirmation from the relevant city authorities.

For a property worth several million dollars, resolving this question before selling could have significant financial consequences.

What If You Already Sold Your Fire-Damaged Property?

Measure TE covers qualifying transactions during a period beginning January 7, 2025, meaning some sales completed before the November 2026 election may fall within its scope.

Homeowners who previously sold fire-damaged properties and paid Measure ULA should review whether they may be entitled to relief.

The city’s implementation procedures will determine how qualifying owners can seek any available refunds or adjustments.

Given the potential amounts involved, reviewing past transactions could be worthwhile.

Does Measure TE Apply to Rebuilt Homes?

Potentially, yes.
The measure is not limited to properties that remain vacant or damaged at the time of sale.

A homeowner who rebuilds a qualifying fire-damaged residence and subsequently sells during the applicable exemption period may also be eligible, depending on the ordinance’s requirements.

This could be particularly relevant for homeowners who rebuild but later decide not to return to Pacific Palisades.

What Should Pacific Palisades Homeowners Do Next?

If you own property affected by the Palisades Fire and are considering selling, we recommend taking several steps before making a decision:

1. Document the fire damage. Preserve inspection reports, photographs, insurance records, remediation invoices, and other relevant evidence.
2. Confirm eligibility. Determine whether the property satisfies the ordinance’s requirements and obtain guidance from the appropriate city departments.
3. Understand your net proceeds. Compare the financial implications of selling with and without the exemption.
4. Evaluate the market. Consider current buyer demand for vacant lots, fire-damaged homes, and completed rebuilds.
5. Plan your timeline. The exemption applies to a limited transaction period ending January 6, 2030.

Because the tax consequences can be substantial, homeowners should consult their tax and legal advisors before relying on an exemption.

What Does This Mean for the Pacific Palisades Real Estate Market?

Measure TE introduces another important consideration for homeowners evaluating their options following the devastating 2025 fires.

For owners who have been hesitant to sell because of the substantial transfer tax burden, the exemption may make a transaction more financially attractive.

It may also influence the market for vacant residential lots and rebuilt properties as homeowners reassess the costs and benefits of holding, rebuilding, or selling.

However, the exemption alone does not determine whether selling is the right decision.

Property values, rebuilding costs, insurance proceeds, financing, and individual circumstances all remain important.

Considering Selling Your Pacific Palisades Property?

At Stephanie Younger Group, we understand that deciding what to do with a fire-affected property involves much more than simply determining its market value.

Whether you’re evaluating a vacant lot, a damaged residence, or a completed rebuild, understanding the potential tax consequences is an important part of making an informed decision.

Our team can help you evaluate current market conditions, understand comparable property sales, and develop a strategy tailored to your goals.

If you own a property affected by the Palisades Fire and are considering selling, contact Stephanie Younger Group for a confidential property evaluation.

Disclaimer: This article is provided for general informational purposes and does not constitute legal or tax advice. Measure TE eligibility and implementation requirements should be verified with the City of Los Angeles and qualified legal or tax professionals. Election results remain subject to official certification.