Who Pays Transfer Taxes in Santa Monica 90402? Base Rates and Measure GS Explained

In Santa Monica (90402), local escrow custom dictates that the seller pays both the Los Angeles County documentary transfer tax ($1.10 per $1,000) and the City of Santa Monica municipal transfer tax ($3.00 to $57.00 per $1,000). For properties selling at or above $8,000,000, Measure GS increases the municipal tax rate to 5.70%, bringing total transfer tax obligations to 5.81%.

Quick Summary

• Real estate transfer taxes in Santa Monica are customarily paid by the seller at closing through escrow deductions.
• Los Angeles County assesses a baseline transfer tax rate of $1.10 per $1,000 of property value across all municipalities.
• City of Santa Monica transfer tax rates scale from 0.30% under $5,000,000 up to 5.70% for transactions reaching $8,000,000 or more.
• Measure GS adds a 5.00% municipal tax surcharge on properties selling at or above $8,000,000, affecting high-value 90402 transactions.
• Transfer taxes are legally negotiable in the purchase agreement, although buyers rarely assume this cost in standard Southern California transactions.

Many home buyers and sellers assume transfer taxes in Santa Monica are minor administrative closing costs split evenly between transacting parties. That reasoning is understandable. It is also, for luxury residential real estate transactions in ZIP code 90402, financially incomplete and potentially costly. In Q4 2026, with single-family properties in 90402 routinely selling between $4,500,000 and $15,000,000, local transfer tax liabilities frequently range from $19,680 to well over $500,000.

Understanding how county baseline taxes interact with Santa Monica municipal tax tiers—specifically Measure GS—is critical when evaluating seller net proceeds or structuring purchase offers in North of Montana, Gillette Regent Square, and adjacent coastal pockets.

The Short Answer in a Table

The Seller Customarily Pays Transfer Taxes in Santa Monica Escrows

Under California Revenue and Taxation Code Section 11911, county and municipal transfer taxes are a joint and several legal obligation of both the buyer and the seller. The state statute does not mandate which party must pay the tax; rather, it establishes that the government entity must receive payment upon the recordation of the grant deed.

However, established real estate escrow customs across Southern California dictate that the seller pays all documentary and municipal transfer taxes. Section 5B of the standard California Association of Realtors (CAR) Residential Purchase Agreement reflects this regional convention by defaulting the selection of seller payment for both county and city transfer taxes.

While escrow customs differ slightly across Northern California or out-of-state markets, Santa Monica transactions adhere strictly to Westside Los Angeles protocol. Unless explicitly negotiated otherwise in an executed purchase contract, title companies and escrow officers in Santa Monica will draft final settlement statements charging 100% of the county and municipal transfer tax against the seller net proceeds.

Understanding local closing cost allocations is standard practice when comparing transactions across Westside neighborhoods. Sellers reviewing settlement terms should consult our breakdown on who pays transfer taxes in Los Angeles.

Santa Monica Transfer Tax Rate Tiers: Base Rates Versus Measure GS

Transfer taxes in Santa Monica consist of two independent taxes calculated on the total gross purchase price of the real estate: the Los Angeles County Documentary Transfer Tax and the City of Santa Monica Real Property Transfer Tax.

1. Los Angeles County Baseline Tax Rate

Los Angeles County assesses a uniform tax rate of $1.10 for every $1,000 of transferred real property value (a 0.11% flat rate). This rate applies across all incorporated cities and unincorporated areas within Los Angeles County without exemption tiers or price caps.

2. City of Santa Monica Tiered Tax Structure

The City of Santa Monica imposes a progressive municipal transfer tax structured into three distinct valuation tiers:

• Tier 1 (Under $5,000,000): The baseline city transfer tax rate is $3.00 per $1,000 of purchase price (0.30%). Combined with the county rate of $1.10, the effective tax rate is 0.41% ($4.10 per $1,000).
• Tier 2 ($5,000,000 to $7,999,999): Enacted via voter passage of Measure GSH in 2016, transfers within this price band are taxed at a municipal rate of $6.00 per $1,000 (0.60%). Combined with the county rate, the total effective transfer tax rate is 0.71% ($7.10 per $1,000).
• Tier 3 ($8,000,000 and Above - Measure GS): Approved by Santa Monica voters in November 2022 and effective since March 1, 2023, Measure GS established a 5.00% tax surcharge on real property transfers of $8,000,000 or more. This brings the municipal tax portion alone to 5.70% ($57.00 per $1,000). When added to the county tax of 0.11%, the total combined tax liability reaches 5.81% ($58.10 per $1,000).

Because ZIP code 90402 encompasses high-value neighborhoods such as North of Montana and the Gillette Regent Square tract, a substantial proportion of single-family transactions cross the $8,000,000 threshold, triggering the maximum Measure GS tax rate.

Key Numbers

How Santa Monica Measure GS Differs From Los Angeles Measure ULA

Property owners in 90402 often confuse Santa Monica Measure GS with the City of Los Angeles Measure ULA (frequently called the "LA Mansion Tax"). Although both measures were voter-approved transfer tax increases targeting high-value properties, their structures, geographic jurisdictions, and rates differ significantly.

• Jurisdiction: Measure GS applies exclusively within incorporated City of Santa Monica borders (ZIP codes 90401, 90402, 90403, 90404, and 90405). Measure ULA applies exclusively within the City of Los Angeles municipal boundaries, including neighboring Venice 90291, Pacific Palisades 90272, and Mar Vista 90066.
• Tax Rate and Thresholds: Santa Monica Measure GS applies a single 5.00% surcharge on transactions at or above $8,000,000 (reaching 5.70% city total). Conversely, Los Angeles Measure ULA enforces a two-tier tax: 4.00% on transfers over ~$5,150,000 and 5.50% on transfers over ~$10,300,000 (adjusted annually for inflation).
• Cliff Effect Structure: Both measures operate on a non-marginal "cliff" basis. Reaching the threshold triggers the tax on the entire purchase price, not merely the dollar amount exceeding the threshold.

What this looks like on a real transaction

To understand how transfer taxes impact seller net proceeds in Santa Monica, consider two practical transaction scenarios: one property selling just below the Measure GS threshold and another selling directly above it.

Scenario A: North of Montana Residence Sold for $4,800,000

• LA County Transfer Tax (0.11%): $5,280
• City of Santa Monica Transfer Tax (0.30% Tier 1): $14,400
• Total Combined Transfer Tax Paid by Seller: $19,680
• Effective Tax Rate: 0.41%

Scenario B: Prime 90402 Estate Sold for $9,500,000

• LA County Transfer Tax (0.11%): $10,450
• City of Santa Monica Transfer Tax (5.70% Tier 3 / Measure GS): $541,500
• Total Combined Transfer Tax Paid by Seller: $551,950
• Effective Tax Rate: 5.81%

In Scenario B, the Measure GS surcharge adds $475,000 in municipal tax beyond what standard baseline tax rates would have generated.

In our Westside transactions across Santa Monica and surrounding pockets, we frequently model seller net proceeds to evaluate whether pricing a home at $7,995,000 yields higher net proceeds than a sale at $8,200,000 due to the non-marginal cliff effect of Measure GS. Selling at $8,200,000 triggers a combined transfer tax of $476,420 (5.81%), netting the seller less cash than a sale at $7,995,000, which carries a tax liability of $56,764.50 (0.71%).

Sellers managing complex real estate transactions or preparing estates should also review broader closing liabilities, such as how to manage supplemental property tax calculations in Los Angeles County.

Federal Capital Gains Tax Deductibility and Escrow Mechanics

A common question among luxury home sellers is whether real estate transfer taxes can be claimed as an itemized tax deduction on federal income tax returns.

Under Internal Revenue Service (IRS) regulations outlined in Publication 523, local transfer taxes are not directly deductible as an itemized tax expense on Schedule A. However, transfer taxes paid by the seller are fully recognized as a direct cost of sale.

When calculating federal capital gains tax liability, the seller subtracts the total transfer tax paid from the gross contract sale price. This reduction lowers the total "amount realized," effectively reducing the net capital gain subject to federal and California state income taxes.

For transactions where the buyer negotiates to pay a portion or all of the municipal transfer tax, the IRS treats the tax paid by the buyer as an adjustment to the acquisition cost, adding that dollar amount to the buyer's tax basis in the property.

Sellers evaluating net equity should coordinate with their certified public accountant (CPA) while analyzing other standard transaction expenses outlined in our overview of who pays escrow fees in Los Angeles County.

When this does not apply

While transfer taxes automatically attach to standard real estate transactions, specific statutory exemptions exist under California law and Santa Monica municipal code:

1. Transfers Between Spouses or Domestic Partners: Transfers of title resulting from marriage dissolution, legal separation, or property settlements are exempt from county and municipal transfer taxes.

2. Revocable Living Trust Transfers: Conveyances that change the method of holding title without altering beneficial ownership—such as transferring a 90402 single-family home into an owner's personal revocable trust—are statutorily exempt under Revenue and Taxation Code Section 11930.

3. Foreclosure Deeds and Deeds in Lieu: Conveyances to a foreclosing beneficiary or mortgagee holding a recorded security interest are exempt from local transfer tax up to the value of the unpaid debt obligations.

4. Governmental Acquisitions: Properties conveyed to public entities, public school districts, or municipal agencies are immune from local transfer taxes.

5. Inheritance and Probate Distribution: Direct transfers from a decedent's estate to qualifying legal heirs via court-approved probate or trust administration do not trigger transfer taxes, provided no monetary consideration is exchanged. Estates navigating inherited property transactions can consult our guide on selling an inherited home in Westchester.

Where unpermitted structures or structural modifications exist on luxury estates in 90402, sellers must also calculate permit remediation costs alongside tax liabilities. Read more in our guide to selling a home with unpermitted work in Mar Vista. Furthermore, multi-family properties or condomiums face distinct statutory rules; condo buyers and sellers can review who pays for special assessments in Santa Monica condos.