City could impose big tax hike on pricey property sales to help homeless

Advocacy groups want voters to decide on drastically raising property transfer tax on $1M+ sales
October 26, 2018 02:45PM

A real estate transfer tax stamp (Credit: iStock)

The real estate transfer tax on property sales of more than $1 million could rise dramatically under a plan proposed by some advocacy groups who want to use the additional revenue to help the homeless.

The Chicago Coalition for the Homeless is leading the call to raise the transfer tax by 160 percent on luxury home sales and large commercial properties, increasing it from $3.75 per $500 to $9.75 per $500, according to the Chicago Sun-Times.

The increase would work out to $12,000 on a $1 million sale and $1.2 million on a $100 million sale.

Supporters of the measure want the City Council to place it before voters in the Feb. 26 election, and some 31 aldermen say they’ll vote to do so. The Council would still need to officially implement the tax hike if voters approve it.

Brian Bernardoni, senior director of government affairs for the Chicago Association of Realtors, said the transfer tax is a poor vehicle for funding homeless programs because of fluctuations in property sales, and he argued the city just could divert the money to programs other than homeless services.

Supporters said money from the tax would help create permanent housing with support services to homelessness by 36,000 households in 10 years. They said the tax would affect about 5 percent of all real estate transactions in the city.

Luxury home sales have lagged in the Chicago area in recent years, with some brokers blaming rising property taxes as a reason.

And owners of large commercial properties are facing the prospect of big tax increases under a new Cook County assessor after Joseph Berrios was eliminated from the race in the March primary. [CSM] — John O’Brien