by Jennifer Millhouse, new IR contributor
Thinking about buying property in Chicago? You'd better hurry up. If the Regional Transportation Authority and the democratic caucus in Springfield have their way, soon property owners will be shelling out even more in taxes.
Representative Paul Froehlich (D-Schaumburg) is a House co-sponsor of Senate Bill 572, and buried deep within the bill is legislation (as amended in the House), which if passed, would funnel more money to the RTA in the form of an additional $3 per $1,000 of real estate transfer tax for properties bought and sold within Chicago. This additional tax would generate an estimated $99,000,000 in revenue.
Currently, buyers in Chicago already pay a whopping $7.50, and sellers $1.50, per $1,000. This bill would bring that total to $12! For comparison, the real estate transfer tax in New York City is $4 per $1,000 up to $1,000,000 of property.
SB0572 could have detrimental effects on the real estate market in Chicago. With the housing market on the decline, and the effects of the sub-prime mortgage fallout, residential and commercial buyers in the Chicago area continue to head to the collar counties for lower tax and price values. It's a challenge for sellers in this market to create enough economic incentive to attract buyers and this tax will make selling property in Chicago even more difficult.
We already know that the RTA is notorious for mismanagement, inefficiencies, waste and corruption. Don't you want to know why our lawmakers are proposing to throw more of our money at the problem? I know that I do. Let's give them a call, shall we?