Sunday, January 27, 2008

Under Daley proposal, Chicago home buyers bear full cost of transfer-tax hike

This was a part of the Transit bailout package that was passed and signed into law from Springfield. I regret that I didn't find this article until just now! From the Trib on Jan. 25...
Aldermen briefed Thursday by Chicago Transit Authority President Ron Huberman and a top mayoral aide said an ordinance imposing the increase will be fast-tracked for City Council approval, with a vote expected at the Feb. 6 meeting.

Some aldermen said they have not yet decided how they will vote, but others said they reluctantly will support it. The increase is expected to win passage.

"You're damned if you do, damned if you don't, but I am going to support it because I need the CTA for the people in my community," said Ald. Patrick Levar (45th). "I have a lot of seniors. I have a lot of people who need to go to work. They have to go downtown and they are going to take a bus or a train."

A CTA funding bill passed by the General Assembly earlier this month authorized the council to increase the transfer tax to help cover the transit agency's employee pension and health care costs.

Chicago's current transfer tax stands at $7.50 for every $1,000 of sales price, with the property's purchaser responsible for payment. The increase would bring the figure to $10.50 per $1,000, generating what officials said Thursday would be $63 million for the transit authority this year.

The buyer also would be on the hook for the additional $3, a decision that aldermen were told was for purposes of uniformity, said Ald. Bernard Stone (50th). The increase would mean someone buying a $300,000 home would pay an extra $900 in tax.

"You've got Congress talking about giving more money away [in a taxpayer rebate to stimulate the economy], and here we are trying to destroy the real estate market, which, if anything, is the machine that keeps the city going," Stone declared. "This is absolutely crazy."

Separate from the city's take, Cook County and the state impose combined transfer taxes of $1.50 per $1,000 on sellers -- taxes people generally notice only when preparing to close on a property.

The Chicago Association of Realtors, which vehemently opposes the proposed increase, has installed a calculator on its Web site ( ) to help property buyers figure out how much more they will pay by typing in the purchase price. The site also leads people to aldermanic phone numbers if they want to register their opposition.

The organization "is dismayed at the CTA's attempt to steamroll this particular ordinance through the City Council to pay for the CTA's mismanagement of its pension fund at a time when the entire economy is undergoing a correction," said Brian Bernardoni, the Realtors' director of government affairs.

The state legislation gives the City Council six months to act.

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