The sale of high-dollar real estate could become more costly in Chicago under a plan supported by the Metropolitan Planning Council (MPC), according to an article in Crain’s Chicago Business.
The MPC – a non-profit, independent, nonpartisan civic organization – wants the city to use graduated rates for real estate transfer taxes in order to raise an additional $150 million to help the city’s homeless, the article stated.
The current transfer tax rate is a flat 1 percent. But according to an MPC briefing paper shared with candidates for Chicago mayor and aldermen, the plan would charge .35 percent on the first $500,000 of property value, 1 percent for the next $500,000, 2.5 percent for $1 million to $5 million, and 3.3 percent for any portion of the sales price above $5 million.
The transfer tax on an office building that sells for $100 million today would be $1 million. But under the MPC proposal, the real estate transfer tax would be $3.24 million.
MPC says the plan would reduce the transfer tax on most real estate sales in Chicago because 95 percent of the transactions are for less than $1 million, according to the article.