Tuesday, March 11, 2008

Chicago Transfer Taxes May Move Burden to Sellers

Chicago Transfer Taxes May Move Burden to Sellers

Well it seems the City Council is getting the message that by increasing the transfer tax on buyers by 40% will act as a disincentive to make home purchases in the city (not to mention the increased sales tax, but thats another topic).

In a blog post earlier (several actually), I complained and vented that this move would place an unfair burden in buyers and that the sellers would be better suited in most cases to absorb the tax since most end up with equity from the sale which can be used to pay the tax (as opposed to having to save for it).

Well Finance Committee leader Patrick O'Connor has asked that the sellers absorb that tax much to the chagrin of lobbyists from the Home Builders Association of Greater Chicago--most of their associates are builders who would be required to absorb the cost as a part of doing business, so they are obviously against it).

Sellers are currently paying only $1.50/1000 of sale price and buyers are paying $7,50/1000. If this new proposal is accepted, sellers would pay $4.50/1000 and buyers would still be paying the $7.50/1000.

Glad to hear someone was reading this blog :) Actually this makes fiscal sense and should not prohibit buyers (especially first time buyers who are saving every penny to buy a home) from making their home purchase and getting this economy (micro and macro) back on its feet.

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