NEW CHICAGO REAL ESTATE TRANSFER TAX – “SELLERS TO SHARE INCREASE WITH BUYERS” – Aldermanic Proposal
NEW CHICAGO REAL ESTATE TRANSFER TAX – "SELLERS TO SHARE INCREASE WITH BUYERS" – Aldermanic Proposal
40% CITY OF CHICAGO REAL ESTATE TRANSFER TAX TO TAKE EFFECT APRIL 1ST. WHO WILL PAY?
When the City of Chicago passed an increase to its already-high Real Estate Transfer Tax last February it was assumed the full burden of this new tax would fall on the buyer’s shoulders. In a little over two weeks the Transfer Tax will increase from its current level of $7.50 per thousand dollars of purchase price to $10.50 per thousand. Historically this entire Real Estate Transfer Tax was borne by all property buyers in Chicago.
Under a proposal floated on Monday however backed by North Side Chicago 40th Ward Alderman Patrick O’Connor this incremental tax would be shared between the buyer and the seller. At this point it is unsure whether the increase would be borne equally by buyers and sellers or split in a different manner.
Today in Chicago the real estate market is sluggish in many locations across all property types. Proponents of the split plan suggest an all-buyer charge for the increase might further depress home sales here. According to Alderman O’Connor "I think [the proposal] recognizes that there are two parties involved in the transaction and to place a significantly higher burden on the purchaser at a time when housing is in real trouble — I think it is a fairer way to do it."
The split proposal is opposed by The Home Builders Association of Greater Chicago. They feel splitting the new tax combined with the State of Illinois and County-mandated $1.50 per thousand of sales price revenue stamps would unduly strip equity from the home sellers. Several alderman including Alderman Bernard Stone of Chicago’s 50th Ward on the far north side disagree.
The measure is expected to be considered by the full Chicago City Council on Wednesday March 12th.
Read Gary Washburn’s article in yesterday’s Chicago Tribune for more details.
DEAN MOSS & DEAN’S TEAM CHICAGO
