Thinking about listing your Sherman Oaks home and wondering how LA transfer taxes will affect your bottom line? You are not alone. Transfer taxes can feel confusing when you are focused on timing, prepping, and pricing. In this guide, you will learn what taxes apply in Sherman Oaks, who typically pays, how escrow calculates them, and a simple way to estimate your net proceeds before you list. Let’s dive in.
What applies in Sherman Oaks
Sherman Oaks sits inside the City of Los Angeles within Los Angeles County. That means two layers of transfer tax may apply when you sell:
- Los Angeles County documentary transfer tax.
- City of Los Angeles Real Property Transfer Tax.
Both taxes are assessed on the recorded deed and are normally calculated and collected by escrow at closing. These are separate from property taxes and other closing costs.
Who typically pays
In California, who pays transfer taxes is negotiable. In most local practice, the seller pays the county and city transfer taxes unless the purchase contract says otherwise. Your purchase agreement controls, so confirm the allocation during offer negotiations.
How escrow calculates and collects
Escrow follows a clear process to compute these taxes at closing:
- Escrow uses the total consideration shown on the deed, usually the contract sale price.
- Escrow applies the county documentary transfer tax formula and the city transfer tax formula. Some formulas are per-thousand or tiered by price bands.
- Escrow adds both taxes to the seller’s closing charges unless your contract allocates them differently.
- Escrow remits payment to the Los Angeles County Recorder and the City of Los Angeles Office of Finance. Recording stamps and receipts show the taxes were paid.
A few practical notes:
- Escrow calculates on the gross consideration unless you qualify for an exemption and provide the required forms before closing.
- If the buyer assumes or takes subject to an existing loan, local rules may still require taxes to be calculated on the full sale price. Confirm with your escrow or title officer.
- For multi-parcel or fractional-interest sales, escrow computes taxes per the recorder’s parcel rules.
Common exemptions and special cases
Certain transfers can qualify for exemptions or special rules. These depend on local requirements and documentation. Examples include:
- Transfers between spouses or registered domestic partners, often related to divorce.
- Some transfers between parent and child, or to a revocable trust in the same person’s name.
- Transfers involving governmental agencies or certain nonprofit entities.
- Court-ordered transfers, bankruptcy, or foreclosure reconveyances.
- Some affordable or low-income housing program transactions.
Documentation matters. Escrow will ask for exemption claim forms and supporting documents, such as trust papers, court orders, or relationship affidavits. If you do not provide the paperwork before closing, escrow will typically collect the taxes and you can pursue a refund after an exemption is approved.
Estimating your net proceeds
Use this simple step-by-step to estimate your net proceeds early.
- Start with your anticipated sale price.
- List payoff obligations: mortgage(s), HELOCs, judgments, and tax liens. Ask lenders for current payoff letters.
- Add your negotiated commissions.
- Estimate escrow and title fees. Your escrow or title company can provide a preliminary estimate.
- Calculate transfer taxes:
- County transfer tax: apply the current county rate or per-thousand formula to your sale price.
- City transfer tax: apply the current city rate table or tiered schedule to your sale price.
- Add both to get your total transfer-tax line item.
- Add prorations and other closing costs, such as property tax prorations, HOA dues, utilities, and any agreed buyer credits.
- Subtract all sell-side costs from the sale price to estimate your net proceeds.
Here is a simple formula you can keep handy:
- Estimated Net Proceeds = Sale Price
- Mortgage payoff(s)
- Commissions and closing costs (escrow, title, attorney, payoff fees)
- County transfer tax (apply county formula)
- City transfer tax (apply city formula or tiers)
- Seller credits and prorations (property tax, HOA, utilities)
Hypothetical example for illustration only
Example using hypothetical rates and round numbers. Confirm all current rates and your actual prorations with escrow and the City and County before you rely on numbers.
- Sale price: 1,000,000 dollars
- Mortgage payoff: 500,000 dollars
- Total commissions and closing fees: 55,000 dollars
- County transfer tax: assume a hypothetical per-thousand rate that produces 1,000 dollars
- City transfer tax: assume a hypothetical per-thousand rate that produces 4,000 dollars
- Seller credits and prorations: 2,500 dollars
Estimated net proceeds = 1,000,000 - 500,000 - 55,000 - 1,000 - 4,000 - 2,500 = 437,500 dollars
Again, these figures are hypothetical and for method only. Your escrow officer can generate a preliminary closing statement that reflects current county and city formulas, your loan payoffs, and actual prorations.
Understanding “ULA” thresholds
You may hear “ULA” in news stories about Los Angeles transfer taxes. In local usage, this can refer to a city ballot measure or ordinance that created additional transfer-tax tiers on higher-value sales. The key points for you:
- These surtaxes, if applicable, are in addition to the ordinary county and city transfer taxes.
- They usually apply only above specific sale-price thresholds. Many Sherman Oaks sales will not hit the higher tiers, but every seller should confirm the current thresholds before signing escrow instructions.
- Ask your escrow or title company to confirm whether any surcharge applies to your sale price, and review your preliminary closing statement.
To verify current rates, tiers, thresholds, and forms, check with the City of Los Angeles Office of Finance and the Los Angeles County Recorder. Your escrow officer will also apply the latest published formulas when they prepare your statement.
How to avoid surprises
A few proactive steps can save you time and stress:
- Ask your escrow or title company for a preliminary closing statement before you list or accept an offer.
- Confirm who pays transfer taxes in your purchase agreement. While local custom often assigns them to the seller, it is negotiable.
- If you believe you qualify for an exemption, gather the required documents early and provide them to escrow before closing.
- For family transfers, trusts, estates, or assumed loans, consult your escrow officer and consider advice from a tax professional or real estate attorney.
Work with a local expert
Transfer taxes directly impact your net. The right plan helps you price confidently and negotiate with clarity. With 25-plus years of San Fernando Valley experience, Arthur Aslanian with Berkshire Hathaway HomeServices California Properties guides Sherman Oaks sellers through pricing, presentation, and the fine print that affects your proceeds. If you are considering a sale, request Arthur’s complimentary staging consultation and market valuation to see your net picture before you list.
Request a complimentary staging consultation & market valuation with Arthur Aslanian today.
FAQs
Who usually pays LA transfer taxes in Sherman Oaks home sales?
- It is negotiable in California, but local practice typically assigns county and city transfer taxes to the seller unless the purchase contract states otherwise.
How does escrow handle transfer taxes at closing on a Sherman Oaks sale?
- Escrow calculates the county and city taxes from the consideration on the deed, adds them to closing charges, and remits payment to the County Recorder and the City Office of Finance at recording.
Can buyer and seller negotiate transfer taxes in the contract for a Sherman Oaks property?
- Yes. You can shift responsibility or provide credits in the purchase agreement. Confirm the allocation before you accept an offer.
Are refunds possible if I qualify for an exemption after my Sherman Oaks closing?
- Often yes, but you must file the city or county claim with supporting documents. It is faster to provide exemption paperwork to escrow before closing.
Do assumed mortgages change the transfer-tax calculation in Los Angeles?
- They can. Local rules may require taxes based on the full sale price, not just net cash. Confirm treatment with your escrow or title officer.
How do transfer taxes affect my net proceeds when selling in Sherman Oaks?
- They reduce your net directly. Use the step-by-step method in this guide and ask escrow for a preliminary closing statement that reflects current county and city formulas.
