Chicago’s real estate industry is bracing for a battle over a proposal to more than triple the transfer tax on any property sold for more than $1 million.
The proposal – called Bring Chicago Home – would create a non-binding referendum that would ask the Chicago City Council to raise real estate transfer taxes to 2.65% from 0.75%, according to Crain’s. The extra income would be used to help the homeless.
While the industry has been silent on the proposal so far, Kris Anderson, vice president of government affairs for the Chicago Association of Realtors, said they are waiting for the city council to pass the proposal to voice their opposition. Anderson told Crain’s he is prepared to “activate our 17,000 members against this” whenever the measure is on the board’s agenda.
If passed, the measure would generate $158 million to address the city’s homelessness problem, according to a 2021 tax analysis by Crain’s.
A growing number of aldermen support the measure, and it has the backing of a group of 80 interfaith clergy who have asked Mayor Lori Lightfoot to back the measure.
“Anyone who buys a million-dollar property can afford to pay a little more to make sure others have a place to live,” Mike Eldridge, a member of the Jewish Council for Urban Affairs, who supports Crain’s, told Crain’s. the tax hike. in April.
Property industry groups opposing the proposal are silent for now, but they say the argument that those buying at the top of the market have extra funds to tackle homelessness may appeal to many aldermen and voters – many of whom do not. own million dollar homes.
“The idea that if a building is big and expensive, there must be someone sitting there who has a lot of money is incorrect,” Farzin Parang, executive director of the Building Owners & Managers Association in Chicago, told Crain’s. “There is a difference between the cost of assets and personal income.”
Parang said the increase could create more challenges for the already struggling commercial property sector.
Similar taxes are being considered in Los Angeles and New York, where, like Chicago, homelessness has increased while the luxury real estate market has seen record growth during the pandemic.
“It’s not a large-scale tax for everyone,” Mike Kelly, director of government affairs at the New York State Association of Realtors, told Crain’s. “It’s a tax that only affects people who buy or sell these expensive properties. Sounds better to lawmakers.
Currently, in Chicago, a buyer pays $7,500 for every million dollars paid in the purchase price, which would increase to $26,000 for $1 million.
[Crain’s] —Miranda Davis