Final City Council vote on ballot measure for hike in  transfer taxes delayed

A final City Council vote on whether to approve Mayor Brandon Johnson’s move to put a proposed transfer tax increase on the March city ballot has been delayed.

The move comes a day after the Bring Chicago Home proposal passed by a 32 to 16 vote, setting up what seemed to be a certain victory for the Johnson administration that would have been made official today.

Alderpersons Maria Hadden, Matt Martin, and Carlos Ramirez-Rosa — all supporters of the policy — used a parliamentary measure to postpone the vote until a City Council meeting scheduled for next week, Crain’s reported. This tactic was used to prevent opponents from doing the same, with little light shed on the maneuvers on each side in the matter.

Assuming it gets final approval as expected, the campaign surrounding the March referendum will likely feature a fiery battle between Chicago progressives who believe the policy will help curb homelessness and a real estate community worried about its adverse effects. Critics  argue that Bring Chicago Home will burden a real estate industry that’s already grappling with high interest rates, subdued sales and sky-high vacancy rates in the office and retail sectors. 

The revised proposal, unveiled in August, abandons the initial plan to raise the flat transfer tax rate from 0.75 to 2.65 percent for all property sales valued at $1 million and up. Instead, it introduces a tiered system that would lower the rate for sales under $1 million to 0.60 percent, while increasing it to 2 percent for transactions between $1 million and $1.5 million. Furthermore, the rate would climb to 3 percent for all sales exceeding $1.5 million.

This new structure offers a tax break for the majority of homeowners, potentially enhancing the proposal’s appeal to referendum voters. If the referendum is approved, a subsequent City Council ordinance next spring will determine how the estimated $100 million in added tax revenue is allocated for more affordable housing and anti-homelessness initiatives. Funds stemming from higher transfer taxes — a one-time fee charged upon buying a property — would be expected to flow into the city starting in 2025. 

—Quinn Donoghue