The State of Illinois and Cook County impose transfer taxes on the sale of real estate, as do a number of municipalities, including the City of Chicago.
The Chicago transfer tax is $3.75 per $500 of the transfer, and it’s the responsibility of the buyer – although, like everything else in a real estate transaction, who actually pays it is negotiable. Chicago also imposes a $1.50 per $500 transfer tax to provide financial assistance to the CTA, and that tax is the seller’s responsibility.
Revenue from real estate transfer taxes is a good proxy for the health of the real estate market – a strong market results in increased revenues and revenues plummet in a weak market.
Chicago’s 2012 Proposed Budget (PDF) projects total transaction tax revenues of $73.4 million, below actual 2010 revenues of $81.3 million and 2011 year-end estimates of $78.2 million.
Real estate transfer tax revenues were $242.3M in 2006, $205.8M in 2007, $119.5M in 2008 and $61.9M in 2009.
In brief, the City of Chicago isn’t budgeting for much of a rebound in the real estate market in 2012. Wilmette is also budgeting for a slow year.
Not every municipality imposes a tax on the transfer of real estate, but if yours does you can examine its budget for an informed guess on next year’s real estate market velocity.