The Chicago City Council puts a “mansion tax” on the March 2024 ballot
The Chicago City Council is asking voters on the March 2024 ballot to approve or reject a tax increase on million-dollar property sales. The move would primarily affect commercial real estate, adding to Chicago’s anti-business reputation.
Chicago voters will decide the fate of Mayor Brandon Johnson’s proposal to raise the property transfer tax on properties worth $1 million. Chicago City Council The referendum was approved by 32 votes to 17, and voters will have the final say in March.
Currently, all Chicago real estate sales are subject to tax 0.75%. The proposal would create a Gradient Structure based on the value of the property being sold.
What does the plan do with the real estate transfer tax?
- It reduces it to 0.60% for properties worth less than $1 million.
- It increases to 2% for properties valued between $1 million and $1.5 million.
- It increases to 3% if its value is more than $1.5 million.
Those who support the plan Argues The new revenue generated by this increase will help combat homelessness by investing in affordable housing projects exempt From the tax.
Opponents They argue that the new structure will force landlords to raise rents on tenants to cover costs and hurt real estate markets. Post-pandemic recovery. While Johnson called it a “mansion tax,” the reality is more than $1 million commercial Real estate sells more often than residential: 9 to 1 from April 2021 to April 2022.
Johnson’s plan has also been criticized Failure to detail How the funds will be used to impact homelessness.
If approved, it will be done does not take effect Immediately. Voters will simply give the City Council permission to enact the plan, perhaps in 2025.
the “Bring Chicago home” The plan was one of Johnson’s biggest campaign promises. This would require approval by a majority of voters in a March referendum. Below is Precise language That will appear on the ballot.
Should the City of Chicago mandate:
- Reducing the real estate transfer tax by 20% to establish a new transfer tax rate of $3 per $500 of the transfer price, or portion thereof, for that portion of the transfer price that is less than $1,000,000, which must be paid by the purchaser of the transferred property unless the purchaser is exempt from The tax is only under state law, in which case the seller must pay the tax; And
- Increase the transfer tax by 166.67% to establish a new transfer tax rate of $10 per $500 of the transfer price or portion thereof, and that portion of the transfer price between $1,000,000 and $1,500,000 (inclusive) must be paid by the buyer. Real estate transferred unless the buyer is exempt from tax only under state law, in which case the tax must be paid by the seller; And
- Increase the real estate transfer tax by 300% to establish a new transfer tax rate of $15 per $500 of the transfer price, or portion thereof, for that portion of the transfer price exceeding $1,500,000 paid by the purchaser of the transferred property unless the purchaser is exempt from the tax only under state law In this case, the seller must pay the tax?
The current rate of property transfer tax is $3.75 per $500 of all or part of the transfer price, and the proceeds are used for general corporate purposes. The revenue generated from the increase (the difference between the revenue generated under the increased rate and the current rate) will be used for the purpose of addressing homelessness, including providing affordable permanent housing and services necessary to obtain and maintain permanent housing in the City of Chicago.