Real Estate Transfer Tax

ISSUE Updates

updated 3/22/24

On March 22, the Associated Press called the race for the real estate transfer tax referendum, officially confirming its defeat.

updated 3/8/24

On Wednesday, March 6, the Illinois Appellate Court reversed the ruling from February 23. This means that votes for the transfer tax question on the primary election ballot will be counted.

As of March 14, 2024, the below virtual event was hosted:

updated 2/28/24

On Friday, February 23, a Circuit Court judge ruled in favor of a lawsuit that requested the Bring Chicago Home transfer tax increase question to be removed from the primary ballot. 

In the lawsuit, the plaintiffs claimed the language included on the ballot was considered illegal by asking voters to approve a tax decrease while also asking for two other increases in the same question. Additionally, they argued the City Council could have approved the decrease without voter approval. Judge Kathleen Burke sided with and granted relief for the plaintiffs Friday, and Monday entered a court order, which directs the Board of Elections to NOT count the votes cast for this ballot question. Find out more about what this means and what’s next here.

updated 1/18/24

On Thursday, January 18, 2024, at the 2024 Market Outlook event, Tom Benedetto, the Director of Local Advocacy with the Illinois REALTORS® presented an update on Chicago’s transfer tax ballot question, the campaign surrounding the issue and its potential impacts on Chicago.

Sign up to stay in the loop on how you can help stop the increased transfer tax.

View his presentation below:

updated 11/7/23

On Tuesday, November 7, the proposed Real Estate Transfer Tax resolution was approved by Chicago City Council (32-17). From here, the resolution will be added to the March 2024 primary ballot to be voted on by Chicago residents. While we did not get the outcome intended, passage of this resolution was anticipated. Our strategy includes continued education and outreach over the coming months leading up to the March primary.

updated 11/1/23

The proposed Bring Chicago Home transfer tax resolution was approved by the City Council Rules Committee on Tuesday, October 31, advancing it to a vote by the full City Council. Director of Local Advocacy Tom Benedetto, Illinois REALTORS®, provided testimony on the resolution during yesterday’s meeting, which can be read in full here. If the proposal is passed by City Council, it will be voted on by residents during the primary election in March.

updated 10/5/23

On Wednesday, October 4, City Council held a hearing on the proposed real estate transfer tax increase. While a representative from our association and Illinois REALTORS® was prepared to testify during the hearing, we were not allowed to do so as we were not chosen in the lottery. Both organizations were involved in initial discussions with Council members and the administration throughout the summer on the proposed tax increase. Since August, the Mayor’s office and proponents of the tax increase have excluded all representatives of the real estate industry from deliberations.

The resolution must now go through the Rules Committee and then be approved by City Council. If it is approved, the resolution will end up on the March 2024 primary ballot to be voted on by Chicago residents.

updated 9/15/23

A proposed resolution to the real estate transfer tax was introduced to City Council that would raise the real estate transfer tax on properties over $1 million. In October, City Council will vote on whether the resolution will end up on the March 2024 primary ballot to be voted on by Chicago residents. The introduced language for the resolution can be read here.

Currently, transfer taxes for all properties are 0.75%. The proposed resolution would create a tiered, marginal structure on these taxes. This means:

• Anything up to $1 million would be taxed 0.6%
• Sales between $1 million and $1.5 million would be taxed 2% on the amount over $1 million
• Sales over $1.5 million would be taxed 3% on the amount over the $1.5 million mark

For example, a property that sells for $1.2 million would be taxed 0.6% on the first $1 million, and then taxed 2% on the $200,000. 

updated 5/4/23

Chicago currently has a law called the Real 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 called Bring Chicago Home would 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.

Issue Summary

Chicago currently has a Real Estate Transfer Tax (RETT) that is imposed when titled real estate property is transferred within the city of Chicago.

In fall 2023, Mayor Brandon Johnson introduced a resolution to the real estate transfer tax to City Council that would raise the real estate transfer tax on properties over $1 million. The introduced language for the resolution can be read here.

Currently, transfer taxes for all properties are 0.75%. The proposed resolution would create a tiered, marginal structure on these taxes. This means:

• Anything up to $1 million would be taxed 0.6%
• Sales between $1 million and $1.5 million would be taxed 2% on the amount over $1 million
• Sales over $1.5 million would be taxed 3% on the amount over the $1.5 million mark

For example, a property that sells for $1.2 million would be taxed 0.6% on the first $1 million, and then taxed 2% on the $200,000.

On Tuesday, November 7, 2023, the proposed Real Estate Transfer Tax resolution was approved by Chicago City Council (32-17). The resolution was added to the March 2024 primary ballot to be voted on by Chicago residents.

On Friday, February 23, 2024, a Circuit Court judge ruled in favor of a lawsuit that requested the Bring Chicago Home transfer tax increase question to be removed from the primary ballot.

On Wednesday, March 6, the Illinois Appellate Court reversed the ruling from February 23. This means that votes for the transfer tax question on the primary election ballot will be counted.

Read the historical perspective below.

Our Stance

As an association and REALTOR® community, we oppose the proposed Bring Chicago Home transfer tax resolution. This legislation will discourage investment in our city and increase the cost of housing. We want to ensure Chicago remains a vibrant place to live, work and play, and we do not believe this resolution will help us reach this mission.

We agree with Mayor Johnson that homelessness in our city is a serious issue that needs to be addressed; however, we do not believe that an increase in the transfer tax is the way to solve it. The proposed increase in taxes will not only impact residential homebuyers and sellers, but also greatly impact our already struggling commercial sectors and impede future investment in our city.

• This is not just a tax on high-end homes, but all properties over $1 million. The increased tax will discourage commercial investment in our communities.
• The transfer tax increase will make housing more expensive. More than half of Chicago’s population are renters and the costs to purchase rental units will be passed down to tenants.
• Many Chicago families pool resources to live in multifamily buildings that allow them to rent out a unit. This tax would take away thousands of dollars from families trying to build wealth.
• Many small neighborhood residential buildings with ground-level retail are valued at $1 million or more. The tax could force grocers, health care facilities and businesses out of neighborhoods.

Resources

View and download REALTORS® in Opposition to Real Estate Transfer Tax’s flyer regarding the transfer tax referendum and vote.