Mayor Brandon Johnson’s transition team is urging him to follow through on his campaign promise to triple the one-time city transfer tax on property sales of $1 million and above, a proposal that’s getting most of the attention in Chicago’s real estate world .
Johnson’s transition team released a 223-page report this week, brought together by nearly 400 appointees who serve on 11 subcommittees to recommend policy steps to address affordable housing, affordability and issues of sustainable development, public safety and taxation. report.
The so-called “mansion tax” — a somewhat misleading nickname, since the increased tax would likely hit commercial properties harder than residential properties — has also been supported by transition members and would put $1 million in sales tax on real estate transactions Tax rates tripled or higher.
If the proposal passes, the tax rate would jump from 0.75% now to 2.65% of the sale price. Transfer tax is a one-time cost incurred when buying a property, and the proposed city tax increase would be on top of the amount already paid to the state and Cook County on most transactions, regardless of their price.
The transfer tax increase, part of Johnson’s backed “Take Home Chicago” initiative to end homelessness, would add an additional $163 million a year to curbing homelessness and easing the city’s stress crisis. The affordable housing crisis. According to Johnson’s transition team.
Los Angeles passed similar legislation, which took effect earlier this year, that imposes a mansion tax on sales of $5 million or more, directing the proceeds to address homelessness. Although the new tax has been in effect for months, it has generated far less revenue than backers expected.
Opponents say the Windy City’s taxes are already too high because it has the second-highest commercial property taxes in the country. If the bill passes, Chicago would have the second-highest transfer tax rate in the country, trailing only Philadelphia.
Not surprisingly, Johnson’s transition team is pressing the mayor to follow through on his campaign promise to more than triple the transfer tax rate. Julie Dworkin of the Bring Chicago Home campaign was named to a transition team on Johnson’s housing subcommittee. Still, next steps for the proposal are unclear. The report recommends that the mayor’s office work to gain more support from council members for the measure.
The report also said Johnson’s team wanted to “double down on” core industries such as manufacturing, life sciences, transportation, logistics, food innovation, finance and technology. Johnson, meanwhile, wants to expand growing industries such as cannabis cultivation for “inclusive growth,” CoStar reported.
As additional measures to tackle homelessness, the administration wants to provide property tax breaks, build more transit-oriented projects and increase the supply of affordable housing by 35 percent over four years.
— Quinn Donoghue