In this post, we discuss a proposed graduated real estate transfer tax for property sales in the city of Chicago supported by Mayor Lightfoot.
The City of Chicago is facing an $838 million budget gap faces next year.
Mayor Lightfoot says she doesn’t want to increase property taxes.
Instead, she has proposed taxing high valued homes at a higher transfer tax rate.
During the most recent city council meeting, Mayor LoriLightfoot said her administration will be planning a graduated real estate transfer tax.
Lightfoot explained her reasoning: “This will bring relief to homeowners whose houses sell for under $500,000, while owners with higher-valued homes will pay more of their fair share.”
She further said, “We are committed to addressing homelessness and housing instability, and putting real resources toward these problems.”
The idea of a graduated real estate transfer tax in Chicago has been proposed before.
In 2018, the idea was promoted in the Chicago Sun-Times by Marisa Novara, at the time a Metropolitan Planning Council member, and author Daniel Kay Hertz.
At the time, then-Mayor Rahm Emmanuel said that their idea “tax treated homeowners like an ATM.”
But in 2019 Daniel Kay Hertz is now the policy director of the Chicago’s Department of Housing and Marisa Novara is now Housing Commissioner of the DOH. They have the opportunity to promote their ideas directly to lawmakers.
In her speech in Springfield after becoming mayor, Lightfoot said that the city needed help with pension obligations. Governor J.B. Pritzker said that this was not an option.
Now the city needs to find another way to fund half-a-billion in new pension obligations over the next three years.
Many Chicago homeowners on the north side are already still in shock from large increases in their property taxes last year.
Homeowners in Illinois already pay the second-highest property taxes in the country.
Mayor Lightfoot has said she doesn’t want to go to the “old playbook,” and increase property taxes again.
For now, she is trying to “avoid that measure,” but has also said that “nothing was off the table.”
Will an increased real estate transfer tax on homes over $500,000 be the solution?
At this point, we will have to wait and see.
The Law Offices of Lora Fausett P.C. provides real estate law services including loan modifications, buying and selling legal assistance, short sales and deeds in lieu, mortgage foreclosure defense, and more.
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