How LA’s Mansion Tax is Reshaping Luxury Home Roofing Strategies and Creating New Opportunities for Smart Contractors

Los Angeles’ luxury real estate market has undergone a dramatic transformation since April 2023, when Measure ULA imposes a 4% tax on sales between $5 million and $10 million, and a 5.5% tax on sales above $10 million. This so-called “mansion tax” has created ripple effects throughout the construction industry, particularly impacting high-end roofing contractors who serve luxury properties. As there were just 166 single-family home sales of $5 million or more, representing a drop of roughly 68% in the year following implementation, roofing professionals have had to adapt their strategies to navigate this new market reality.

The Mansion Tax’s Immediate Impact on Luxury Home Sales

The numbers tell a stark story. On a $10 million sale, that means the seller would have to pay all the usual taxes and fees as well as an additional $550,000, making property transactions significantly more expensive. This has led to a reduction in the number of high-value homes on the market, as homeowners become reluctant to absorb these substantial costs.

The tax’s impact extends beyond just sales volume. Since Measure ULA took effect, the odds of a transaction exceeding the tax threshold have dropped by 50%. Transactions involving commercial, industrial, and multifamily properties fell by 30-50%. This dramatic market shift has forced luxury roofing contractors to rethink their business models and service offerings.

Strategic Adaptations by High-End Roofing Contractors

Smart roofing contractors are adapting to these market changes by focusing on maintenance and restoration rather than just new installations. Since updates focused on maintenance—like roof repairs, window replacements, or repainting—preserve your home’s condition without signaling a major value boost. By prioritizing maintenance over major additions, you may avoid triggering a new property tax assessment, luxury homeowners are increasingly interested in preserving their current properties rather than selling.

This shift creates opportunities for experienced contractors like Royal Roofing, a family-owned and operated business, we focus on building long-term relationships that span generations. Our leadership takes a very involved approach to Royal Roofing, bringing decades of hands-on experience and a strong foundation in quality roofing practices. The company’s approach aligns perfectly with current market needs, as they specialize in roof repairs, maintenance, restoration, re-roofing, and more, we serve commercial, industrial, and multi-family properties with solutions that are built to last. By treating every client like family and consistently delivering superior quality and service, we strive to become your local roofing contractor for life.

The Value of Maintenance Over Major Improvements

Understanding the tax implications of roofing projects has become crucial for luxury homeowners. A new roof might do a lot of good for you and your home, but it’s probably not going to help you out much on your taxes this year. Projects like roof replacements are not deductible, not immediately at least. However, strategic maintenance can help homeowners avoid triggering property reassessments while maintaining their home’s condition.

For properties approaching the $5 million threshold, even routine maintenance becomes a strategic decision. Most towns treat a new roof as routine home maintenance, as long… However, if you are making a major upgrade and/or other cosmetic changes to the appearance of your house while adding the new roof, it could draw the attention of the assessor.

Royal Roofing’s Market Position

Located in Bell, California, Royal Roofing serves the greater Los Angeles area, including Beverly Hills, Orange County, San Fernando Valley, Long Beach and San Pedro, and the San Gabriel and Pomona Valleys. The company’s values haven’t changed. We still—and always will—believe in doing the job right and standing behind our work, making them well-positioned to serve clients navigating the mansion tax environment.

For homeowners seeking a reliable roofer los angeles area, Royal Roofing’s commitment to quality and long-term relationships becomes even more valuable in today’s market. Their superior workmanship and unmatched stellar service, both at the best price provides remarkable long term ROI value… We will tell you why our roofs last years longer, and we back that up with our unrivaled warranties.

Future Market Outlook and Opportunities

While the measure raised roughly $480 million. That’s a sizable sum, but lower than expected compared to initial projections, the mansion tax appears to be a permanent fixture of the LA real estate landscape. As of December 2024, Measure ULA remains in effect, continuing to impose additional transfer taxes on qualifying property sales in Los Angeles. There are ongoing legal appeals to this measure, however, recent court decisions have upheld the tax, reducing the likelihood of a repeal.

This creates a sustained opportunity for roofing contractors who can adapt their services to focus on preservation, maintenance, and strategic improvements that don’t trigger tax assessments. Companies that can provide comprehensive maintenance programs and help homeowners maximize their current properties’ longevity will likely thrive in this new environment.

Conclusion

LA’s mansion tax has fundamentally altered the luxury real estate landscape, creating both challenges and opportunities for high-end roofing contractors. Success in this market requires understanding not just roofing techniques, but also the financial implications of different project types for luxury homeowners. Contractors who can provide strategic guidance alongside quality workmanship—helping clients maintain and preserve their valuable properties without triggering unwanted tax consequences—will find themselves well-positioned in this transformed market. As the industry continues to adapt, the emphasis on long-term relationships, quality maintenance, and strategic planning will only grow stronger.