REAL ESTATE TRANSFER TAX
ISSUE
updated 5/4/23
Chicago currently has a law called theReal Estate Transfer Tax(RETT). This is a tax imposed when titled real estate property is transferred within the city of Chicago.
As of spring 2022, a proposal calledBring Chicago Homewould more than triple the transfer tax, to 2.65% or $26,500 per million dollars spent on residential and commercial properties, to provide funding for homelessness prevention and services.
What does this mean for the real estate industry?
REALTORS® oppose any increases in real estate-related taxes and/or fees that will increase the cost of a transaction.
Our Stance
We remain committed to opposing increases to the Real Estate Transfer Tax.
Transfer taxes are not a reliable source of funding for the issues they’re attempting to solve. The housing market changes, and predictions can really miss the mark. The transfer tax is an unreliable and highly unpredictable source of revenue.
Additionally, with the rise in remote work, people don’t have to live in Chicago. We are in competition for investment with every city now. We should be rolling out the welcome mat, not making it more expensive to live and relocate business here.
If the City Council seeks the ballot referendum, CAR will vigorously oppose the measure through meetings with members of the City Council and by engaging our members to make sure elected officials know we are the voice of real estate.
Historical Perspective
As of 2019, the rate of this tax is 0.75% ($0.75 per $500) of the property’s purchase price. In 2008, an additional supplemental tax of $1.50 per $500 was added to the RETT, making the total tax $2.25 per $500. Funding collected from this supplemental tax supports the Chicago Transit Authority (CTA), where the buyer pays the supplemental rate of $1.50 per $500, and the seller pays the rate of $0.75 per $500.
Legislative Outlook
Mayor Brandon Johnson campaigned in support of Bring Chicago Home. We expect his administration to pursue an increase in Chicago’s Real Estate Transfer Tax (RETT) as part of the Bring Chicago Home initiative. As of May 2023, no ordinance has yet been introduced, but the Illinois REALTORS®are laying plans for a full-scale advocacy campaign to combat the proposed tax increase and partnering with other industry groups in opposition.