Hope you're enjoying the weekend, folks!

Effective April 1st, a new, higher Chicago Real Estate Transfer Tax takes effect.  Under the new law, the tax here increases from it's current $7.50 per thousand of purchase price, up 40%, or $3.00, to $10.50/M.  For many years, this Chicago Tax has been the responsibility of the BUYER of the property.  Hence, a family purchasing a $400,000 home here would have to pony up an additional $1,200 to allow the deed to record.

Now, according to near-unanimous action by the Chicago City Council this past Wednesday, the BUYERS keep the same tax bite.  But, by law, the tax must increase!

So the SELLERS must now kick in!

Effective next month, the seller of most properties in Chicago, excluding certain trust, in-family, and court ordered sales, must pay $3.00 per thousand of the ioncreased Chicago Transfer Tax.  On that $400,000 home in our example, the seller will now pay $1,200.

The Chicago Seller Transfer Tax comes IN ADDITION TO a $1.50/M State of Illinois and Cook County Tax - bringing the total seller liability for selling your home in Chicago to $4.50 per thousand of the price.  Again, in our example transaction, the buyer of this theoretical $400,000 home or condo would pay $3,000 for the privilege of his purchase here.  The seller - $1,800.

City of Chicago buyers and sellers must keep this new tax structure in mind when calculating their closing costs.

The increased Transfer Tax in the city was passed last February, after the State of Illinois acted the previous month to use this new tax revenue to fund a big financial shortfall in Chicago-area Mass Transit, and the Chicago Transit Authority.   It was originally conceived as a straight buyer's task.  But, with a strong backlash from The Chicago Association of Realtors, and an already-weak market here, the Chicago City Council, led by North Side 40th Ward Alderman Patrick O'Connor (whose wife just happens to be a successful Realtor here), made the decision to pass the new portion of the tax on to sellers.

The Illinois State Legislature also passed a 0.25% increase in the sales tax in Chicago and Cook County, the county in which the city is located, and a 0.5% tax increase in suburban Chicago counties, to help fund the CTA and mass transit bailout.  (See our BlogChicagoHomes.com post on February 7th for more details).

Still, with the increase, the Real Estate Transfer Tax in Chicago is still far lower than similar taxes in New York City and Philadelphia. 

New Yorkers selling in the city must fork over $14.25/M if the purchase price exceeds $500,000 (in other words, virtually everything in New York).  In addition, New York Home Buyers must pay a Mortgage Recording Fee of $21.75 per thousand.  In Philadelphia, sellers ante up $30.00 per thousand, plus another $10.00/M required by the State of PA.

In sum, folks - MOVE HERE TO CHICAGO - we have a lot of good values in homes and condos for you!  But you'll have to bring a few more bucks to the closing table when you sell.

See our post today via our Blog Center - BlogChicagoHomes.com - for more details, including a link to Gary Washburn's article in last Thursday's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO