I wanted to update everyone from an earlier post. Back in February the City of Chicago passed an increase in the Real
Estate Transfer Tax Stamp that was to be paid by the buyer. It was an additional $3.00 per $1,000 spent on top of the $7.50 per $1,000 spent that already existed. An increase of 40%. In mid March a bill was passed changing the less than one month old previous bill which now put the burden of the tax increase on the seller. So instead of the $10.50 being paid entirely by the buyer it is now split $7.50 per $1,000 by the buyer and $3 per $1,000 by the seller. On top of this for the seller is the $1.50 per $1,000 spent that they pay the county and state. As stated in my earlier post this was all to help bail out the CTA (Chicago Transit Authority.)
Problem solved. Right? I argued earlier that the tax was unfair to buyers (especially first time buyers) and that it was going to have a negative effect on an already difficult real estate market. So what is wrong with hitting the sellers? Well to begin with they already paid the $7.50 per $1,000 when they purchased. So really doesn’t matter how you split it you’re still going to have to pay it either on the way in or on the way out. So current homeowners looking to move are the guinea pigs that are being hit with this tax twice. Secondly they already pay $1.50 per $1,000 to the county and state when they sell and now this is on top of that. Glad to see they came up with a solution that was fair for everyone…yeah right!!
As long as we keep seeing “The Governor” at Cubs games and Bulls games we’ll be doing just fine. As I’ve said before and I’ll say again…it is easy to complain after the fact. What we really need to do is stay involved when the decisions are being made and voice our collective opinion then. A lot easier to stop thing before they go into effect. Just wanted to update you on the situation. Good news for home buyers is effective April 1, 2008 their transfer tax for purchasing real estate in Chicago remains at $7.50 per $1,000 spent. Any clarification just let me know and I’d be happy to help. I’ll put out a new list of what is the responsibility of the seller and what is the buyers shortly.
Related Articles
3 users responded in this post
Well gosh. This is what happens when politicians get to make all the rules. You should run for the city council or something Mike! They’re really punishing people who are in a bad situation. This morning I saw something about animals being the victim of this current housing crisis. That families find themselves without a home, without a job, and needing to give up their pets as well. PAWS Chicago has even started a a rescue program for families going through foreclosure. Check this out http://pawschicago.org/CrisisResponse.htm. Crazy right?
What kills me about this one is that I didn’t hear much noise from people that I knew. I think it sneaked in under the radar because people don’t pay it very often. It passed unanimously in the city council without debate.
While this change is welcomed, it still means Chicago has the highest local transfer tax in the Chicagoland area.
The second highest is Cicero at $10/$1,000.
In an effort to make this tax more politically palatable the City Council did create a senior citizen exemption of sorts.
Seller can qualify for a refund of the transfer tax they paid if the transferees
are age 65 years or older, the transferees occupy purchased property as their
personal dwelling for at least one year following the transfer, and if the
transfer price is $250,000 or less. Note the sellers are still required to pay the tax
at closing and then petition the city for refund.
Leave A Reply
Please Note: Comment moderation maybe active so there is no need to resubmit your comments