Key Takeaways:
– Chicago voters will decide in March whether to quadruple the transfer tax paid on real estate transactions worth over $1.5 million.
– The Chicago City Council voted to place the referendum on the spring ballot in an effort to raise money for homeless services.
– The transfer tax for the most expensive buildings would be four times higher than it is today if the measure is passed.
– Chicago Realtors opposed the measure, arguing that it would make living and relocating businesses in the city more expensive.
– Under the measure, the transfer tax on real estate sales worth less than $1 million would decrease slightly, while the tax on sales between $1 million and $1.5 million would increase.
– Proponents of the measure claim that it would raise $100 million per year, but Chicago Realtors argue that the tax is volatile and not a reliable funding stream.
inman:
Proponents said the measure would raise $100 million per year. Chicago Realtors said the tax was volatile and not a reliable funding stream.
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Chicago voters will decide in March whether to quadruple the transfer tax paid on real estate transactions worth over $1.5 million.
The Chicago City Council voted 32-17 on Tuesday to place the referendum on the spring ballot in an effort to raise money to pay for homeless services, a major victory for Mayor Brandon Johnson and allies on the council.
If passed, the transfer tax for the most expensive buildings would be four times higher than it is today. The issue was hotly debated and opposed by Chicago Realtors, which said Tuesday’s vote was expected even as it vowed to continue fighting the measure.
“We are in competition for investment with every city now,” the Chicago Association of Realtors said. “We should be rolling out the welcome mat, not making it more expensive to live and relocate business here.”
Under the measure, which has been dubbed “Bring Chicago Home,” the transfer tax on real estate sales worth less than $1 million would decrease slightly, from 0.75 percent today to 0.6 percent.
The tax on property sales between $1 million and $1.5 million would increase from 0.75 percent today to 2 percent if voters approved the referendum.
The graduated tax would be highest for all property sales above $1.5 million. Those transactions would be taxed at 3 percent, four times higher than the tax is today.
Proponents said the measure, if passed, would raise $100 million per year. The Realtors said the tax was volatile and not a reliable funding stream.
Alderman Nicole Lee, who voted in favor, pointed to the waves of buses that have been bringing migrants from areas near the border to Chicago, adding to existing pressures on the city’s homelessness services.
Lee also committed to working on the final referendum language, noting that the city’s commercial real estate industry was already struggling through record-high vacancy rates, a rapid slowdown in sales and an ensuing drop in prices.
“I acknowledge the concerns of our commercial real estate community that they have over this proposal in the midst of the current drop of commercial property sales in the city, and issues with filling downtown office space,” Lee said.
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Property Chomp's Take:
Chicago Voters to Decide on Increase in Real Estate Transfer Tax
Chicago voters will have the opportunity to decide in March whether to quadruple the transfer tax paid on real estate transactions worth over $1.5 million. The Chicago City Council voted 32-17 on Tuesday to place the referendum on the spring ballot in an effort to raise money for homeless services.
If passed, the transfer tax for the most expensive buildings would be four times higher than it is today. The tax on property sales between $1 million and $1.5 million would also increase. Proponents of the measure, known as "Bring Chicago Home," say it could raise $100 million per year.
However, the proposal has faced opposition from Chicago Realtors, who argue that the tax is volatile and not a reliable funding stream. They believe that increasing the tax on real estate transactions will make it more expensive to live and relocate businesses in the city. The Chicago Association of Realtors stated, "We should be rolling out the welcome mat, not making it more expensive."
The issue has sparked a heated debate, with both sides presenting their arguments. Supporters of the measure argue that the additional revenue generated from the tax increase will help address the city's homelessness crisis and provide much-needed funding for homeless services. They believe it is crucial to invest in these services, especially considering the influx of migrants from areas near the border.
Opponents, on the other hand, point to the struggling commercial real estate industry in Chicago. They argue that the proposed tax increase comes at a time when the industry is already facing challenges such as record-high vacancy rates, a slowdown in sales, and a drop in prices. They fear that the tax increase could further dampen the market and discourage investment in the city.
Alderman Nicole Lee, who voted in favor of placing the referendum on the ballot, acknowledged the concerns of the commercial real estate community and committed to working on the final language of the referendum. She emphasized the need to balance the city's financial needs with the challenges faced by the industry.
The outcome of the referendum in March will determine whether the tax increase goes into effect. In the meantime, the debate over the measure continues, with stakeholders on both sides making their voices heard.
