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Chicago Transfer Tax Increase Effective April 1, 2008

By
Real Estate Agent with Coldwell Banker Residential Brokerage

When real estate transfers from seller to buyer, the State of Illinois collects $1 per $1000 of the purchase price.  In addition, Chicago (Cook County) imposes an additional transfer tax amount of $7.50 per $1000, which, effective April 1 (no joke), and much to the chagrin of home sellers, buyers, and real estate professionals, will increase by $3.00 to $10.50 per $1000. 

In essence, this will produce more [negative] financial burden on an already struggling real estate market, players in the market, and Chicago's overall economy.  Ultimately, what we can actually expect to see is a 40% increase in selling prices of all commercial and residential real estate.

Sellers normally pay these taxes from the proceeds of the sale of their property, although buyers in the neighborhood of Lincolnshire assume the burden.  I suggest that you consult with a REALTOR®, title company, or county offices in your jurisdiction, for verification on who pays.

In the end, we can ALL expect to pay!  The question asked most often is, "Where, exactly, will the funds go?"  Some believe the tax money is supposed to go towards rebuilding our infrastructure.  Speculation has it that this is another "fat" tax, and that it will end up in the pockets of the administrators of our deteriorating transit systems.

Judy Orr
HomeSmart - Scottsdale, AZ
Scottsdale AZ and surrounding towns

I work mainly in the southwest portion of Chicago and buyers pay the Chicago transfer taxes here.  I thought that was pretty standard throughout Chicago  Most of the suburbs I work in that have transfer taxes are paid by the sellers.  Of course, everything is up for negotiation and this might be something that is thrown in the contract once the increase occurs.  Everything is negotiable.  But, if buyers are expected to handle this extra burden then why would prices increase, especially with current market conditions and now this increase in transfer taxes?

EDIT:  I just checked the Chicago board website and the additional $3.00 will be paid by the seller.  Since I see transfer taxes in the suburbs of $5.00 and above per $1,000 normally paid by sellers, this isn't as bad as the buyer having to foot the entire increase.  I've always questioned the fact of buyers having to pay such a high transfer tax, but it sure hasn't stopped them from buying.

 

Mar 20, 2008 09:57 AM
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs

Some of you guys can move down south. Louisiana needs people and we are cutting taxes. Property taxes in New Orleans dropped 28% last year and the state just dropped a lot of taxes for business.

 You wonder where these people think up these ideas and wonder where the money goes. it will never be enough. Good luck

 

Mar 20, 2008 09:58 AM
Anonymous
Renee Drumm, ePRO REALTOR

This certainly DOES sound like Chicago's real estate market is going to take a great big "HIT"!  And, with the market as bad as it is nationally, what are local government officials thinking?  This could DEVASTATE your economy!

From one [small-town] REALTOR in Ohio to a "big city" REALTOR, I feel for you!  Buyers and sellers must be getting quite squeemish.  If they decide they'd be better off in Ohio, I would love to assist any referrals you have.  Likewise, if I know of anyone transferring to the North Shore area of Chicago, I will send them to you!

Renee Drumm, REALTOR
Certified e-PRO Internet Professional
Certified Residential Relocation Specialist 
Real Living Realty Services
Celina~Grand Lake St Marys

Mar 20, 2008 10:01 AM
#4
Alan Brown
Coldwell Banker Realty - Davenport, FL
32 Years of Real Estate Experience .
More taxes means less business in any sector of the economy, unfortunately our elected officials usually do not understand that less taxes creates more of everything, more business, more wealth, more jobs. We are slowly heading towards a socialist country.
Mar 20, 2008 10:24 AM