Without debate the bill to increase the transfer tax in the City of Chicago won council approval by a 49-0 vote. The bill (which was introduced by Alderman Patrick O’Connor of the 40th district) adds $3 per thousand dollars of home value to the sellers side on top of the $1.50 they already pay for the state and Cook County. While this isn’t the highest amount a seller pays in the Chicagoland area, Chicago now has by far the highest combined fee of any city.
The City of Chicago is double dipping, as of April 1st 2008 sellers will be paying the $3 per thousand while buyers have been paying $7.50 per thousand for years. So for every $1000 of property value transfered in the City of Chicago there will be $10.50 going to the City and $1.50 that goes to the county and state, a whopping total of $12 per thousand.
Until you put it into context this doesn’t seem that drastic, but picture a home valued at $400,000. Depending on the neighborhood this could be a good size single family home or a one bedroom condo. This $400,000 sale will bring in $4,200 in transfer fees to the City of Chicago, plus another $600 going to the state and county, for a total of $4,800 in transfer stamps. That is 1.2% of the homes value in transfer stamps for every home in the City of Chicago every time it’s ownership is transfered.
No matter how you cut this increase is very bad for the real estate market in Chicago.
Sources:
Chicago Tribune
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2 responses so far ↓
Naheed Amdani || Apr 28, 2008 at 10:46 pm
Since the increase went into effect on April 1, many people selling their homes in Chicago are really feeling it. As it is, with the way the market is right now, many sellers believe that they’re not getting enough money for their homes. I have been at closings where the sellers actually had to bring money to the table in order to close, and it was not pleasant for them. To top it off, the extra $3 for every $1000 of the sales price just hurts. In your example, you mention a $400,000 home — a home for that price means $1200 in city stamps just from the seller, plus the $600 the seller had to pay the state and county anyway. The city needs to find ways to make money, but it is unfortunate for sellers in today’s already depressed real estate market.
Eric- New Orleans Condos and Lofts || May 8, 2008 at 10:47 pm
In New Orleans we are still complaining about $375 transfer tax on any real estate transaction. Put that on top of the 500-600 to close and you are at a thousand bucks. The surrounding areas have no such tax.
We can use more people down south. Thanks for driving them our way along with some more jobs.
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