The city of Chicago's proposed real estate transfer tax, dubbed the “mansion tax” or “Bring Chicago Home” by some, has become the top of a closely watched race in the lead-up to the 2024 Illinois primary.
Chicagoans will be tracking how they voted for the measure as voting closes on Tuesday and votes are counted. The bill would increase the city's real estate transfer tax on all properties by more than $1 million and direct the funds toward homelessness efforts.
What is the proposed real estate transfer tax and how would it work?
Real estate transfer tax is a tax paid to the city on real estate sold. The current rate is a flat fee of $3.75 for every $500 in price. If the proposal passes, he would change interest rates for all residential and commercial real estate to a three-tiered or graduated structure.
For properties sold for less than $1 million, the tax rate would be reduced to $3 per $500. If sales exceed $1 million, the tax rate increases to $10 for every $500 of value between $1 million and $1.5 million. For properties over $1.5 million, the rate will be $15 for every $500 worth of properties over $1.5 million.
The revenue raised from the tax increase will be used to combat homelessness.
Supporters say it would lower taxes on a large portion of home sales while raising revenue by $100 million a year. But opponents warn it could cause serious damage to commercial real estate.
If Chicago's bill passes, the City Council would have to pass an ordinance determining how the money will be spent. Chicago Mayor Brandon Johnson has not announced any specific plans regarding this.
On Wednesday, Citizens United, a nonpartisan research organization, released an analysis of the proposal that highlighted “serious concerns.”
The Civic League analysis found that “the planned use of funds generated by the Chicago Homes referendum is too opaque for voters to fully scrutinize,” and that a graduated real estate transfer tax would have “some There are advantages, but that's it,” he adds. It is an unstable and economically sensitive source of income. ”
Citizens United also took issue with the lack of detail on how the proceeds would be used, saying, “Other than the city laying out a broad strategy to address homelessness and affordable housing, there is no plan for how to use the funds.'' has not been publicly announced.”
Johnson said he would work with aldermen to develop a spending plan if the bill passes.
“The voice of the people is being represented. We just need a little bit more to really meet those needs,” Johnson said.
If the bill passes, the new fees would go into effect on January 1, 2025.
