The price to transfer Real Property in Chicago is going up April 1st!
Effective for transactions that CLOSE after that time (those that close earlier but do not record until after the cutoff do not pay the increase), the Chicago Real Estate Transfer Tax increases to $10.50 per thousand of sales price, up 40% from its current $7.50 level. Here in the city, this tax has been the responsibility of the buyer since its inception many years ago.
Under a new proposal being considered by the Chicago City Council, however, this incremental tax amount would either be split between buyer and seller, or passed on to the seller in its entirety. The plan is being spearheaded by Patrick O'Connor, Alderman of Chicago's 40th Ward on the North Side.
We Realtors, and other real estate professionals, and many homebuyers, are concerned that the new tax might adversely affect a Chicago Real Estate Market already left a bit shaky by the sub-prime mortgage market crisis. Those that are already on the fence - might just stay there, many contend.
Sellers across the State of Illinois already have to pay $1.00 per thousand of price to the state, plus and additional $0.50 per thousand in every Illinois county. This tax has not been increased recently - but a split of the new Chicago transfer tax increase could increase what sellers pay to $3.00 per thousand, or perhaps more.
Opposing the split proposal are The Home Builders Association of Greater Chicago. They feel splitting the new charge would pose an undue burden on sellers, and strip their equity. Far North Side Chicago Alderman Bernard Stone, of the 50th Ward, disagrees.
Other big cities - New York, and Philadelphia, for example, have higher Real Estate Transfer Taxes than Chicago. But the increase, passed to fund Chicago Area Mass Transit, might put a bit of a damper on property transfers at a time when we in Real Estate would like to experience more of them!
Please see our post today at BlogChicagoHomes.com, our Team Blog Center, as well as our post from February 7th further discussing the Chicago Real Estate Transfer Tax increase. We also cite Gary Washburn's article in today's Chicago Tribune discussing Alderman O'Connor's proposal.
DEAN & DEAN'S TEAM CHICAGO
I obviously do not know what the tax burden in Chicago or IL is, but just as an FYI the transfer tax here in NH is $15.00 per thousand and is split between Seller and Buyer. Our State Association of Realtors has fought successfully to stop the tax from going to $20.00 per thousand.
Best of luck to your group