Update: Proposal to Increase Tax on Chicago Real Estate Transfers
A long-debated initiative to increase the transfer taxes on Chicago real estate transfers on transactions over $1 million has stalled — at least for the time being. This initiative, which is often referred to as the “Bring Chicago Home” campaign, seeks to increase the transfer taxes on $1 million transactions by 253%. Chicago’s transfer tax is currently $3.75 per $500. This tax would increase to $13.25 under the new proposal. More than 32,000 properties in Chicago would stand to be impacted by this increased tax.
Any increase in the Chicago transfer tax would require voter approval by referendum. Chicago’s City Council needs to approve such a referendum in order for this question to be put forth to the voters. The City Council has not yet reached consensus on how the tax revenue raised by this increase would be used. Housing advocates have pushed hard for the additional funds be earmarked toward housing programs. However, some members on the City Council have not been comfortable with earmarking the funds toward any specific policy issue.
Numerous real estate stakeholder groups have opposed the Bring Chicago Home campaign. They are concerned about Chicago’s already very high tax environment. This increase would give Chicago the second highest transfer tax in the nation. The real estate community fears that this high tax will be just one more deterrent to those considering investing in Chicago and will slow economic development in the city.
Right now, after much work by housing advocates and certain alderpersons, the Bring Chicago Home campaign has stalled. A recent meeting had been scheduled to allow for City Council to debate the proposed referendum, but was cancelled due to lack of a quorum. No doubt, as we enter election season, this initiative will be debated again in coming months. We will continue to follow this debate closely!