Transfer Taxes: What You Need to Know
If you’re thinking about buying or selling your home, make sure you know about transfer taxes. These taxes are part of your cost when your home is sold and the title goes from one individual (you, the seller) to another individual (the new homebuyer).
The state or city charges transfer taxes to complete a sale and title transfer. Your property’s assessed value and classification determine the total cost of your these taxes.
Chicago follows the Real Property Transfer Tax law. This law states that the transfer tax costs $5.25 per $500 of the transfer price. Three dollars and 50 cents of the $5.25 goes to the city, while the other $1.50 provides financial assistance to the Chicago Transit Authority (CTA). In Chicago, the buyer is responsible for paying $3.75 and the seller is responsible for $1.50.
Certain circumstances may lead to exemptions or credits on transfer taxes. Check out the city’s website to see if you fall into one of these categories.
You will pay these taxes during the closing of the property’s sale, so make sure to figure in the price when buying or selling a home! Make sure to talk to your REALTOR® if you have any questions or concerns about your transfer taxes.
