Land transfer tax bill touted as ‘win-win’ for Lightfoot and the homeless

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State lawmakers are once again trying to revamp the way Chicago taxes real estate sales, hoping for a compromise that gives City Hall the money it needs while providing more money to help local residents. homeless.

On Monday, two lawmakers tabled two bills – one in the Senate and one in the House – that will allow Chicago to restructure its property transfer tax.

During the fall veto session, Mayor Lori Lightfoot lobbied the General Assembly to allow the city to change the city’s property transfer tax structure to provide cash relief to the city .

But Lightfoot faced opposition from Chicago Democrats in Springfield, who wanted much of the money to be spent on affordable housing and services for the homeless, not just the overall budget. from the city.

“No mayor wants to talk about spending dollars because he wants that authority for himself,” said State Representative Delia C. Ramirez, D-Chicago, sponsor of the bill in the House.

Next, Democratic candidate Delia Ramirez meets with the Sun-Times Editorial Board in 2018. File photo.
Rich Hein / Sun-Times

Ramirez and Senator Ram Villivalam, D-Chicago, the sponsor of the Senate bill, said they met with Lightfoot staff and called their proposal a “framework” from which to begin negotiations.

Villivalam said the proposed legislation gives both sides what they want – Lightfoot gets extra money for the city budget, and state lawmakers get money dedicated to fighting homelessness in Chicago.

“This is the ultimate win-win situation where we seek to finance the city’s budget deficit and we tackle one of the biggest, one of the major challenges facing our city,” Villivalam said.

State Senator Ram Vilivalam.

Next, Democratic candidate Ram Vilivalam meets the editorial board in 2018. File Photo.
Hein / Sun-Times Rich File

Lightfoot’s office issued a statement committing to work with lawmakers, the Bring Chicago Home advocacy group “and all other stakeholders on the options” on land transfer rights “and other solutions. incremental income that will help meet the city’s long-term financial needs.

“We are in discussions with the Bring Home Chicago Coalition on how to partner with a legislative proposal that generates incremental income and meets the needs of all of our most vulnerable communities, including homeless residents,” said the spokesperson for Mayor Lauren Huffman.

While some state lawmakers had previously said they wanted at least 60% of new funds from the proposed land transfer tax structure to go to helping the homeless, the new bill would only reserve 25%.

Ramirez said the bill’s tariff structure, which will raise the maximum tax for transfers of ownership more than the proposed Lightfoot, will bring in more revenue than what was proposed during the veto session.

Mayor Lori Lightfoot.

Mayor Lori Lightfoot. Photo file.
Fran Spielman / Sun-Times file

In Chicago, real estate transfers are currently taxed at $ 5.25 per $ 500.

If passed, the bill would also set new rates for property transfer taxes. The bill would reduce the property transfer tax by $ 1 million or less.

Under the proposed pricing structure, real estate transfers of $ 500,000 and less will be taxed at $ 2.75 per $ 500 of the transfer price. For properties transferred between $ 500,000 and $ 1 million, they will be taxed at $ 4.75 per $ 500 of the transfer price.

Transfers between $ 1 million and $ 3 million will be taxed at $ 7.50 per $ 500 of the transfer price. Real estate transfers between $ 3 million and $ 10 million will be taxed at $ 14 per $ 500 of the transfer price and for transfers over $ 10 million, $ 20 per $ 500 of the transfer price.

Editor’s Note: This report has been updated to include a statement from the mayor that arrived after publication.

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