Under Illinois law, which statement correctly describes how transfer-tax payment responsibility is determined in a real estate transaction?
Correct Answer
B) Payment responsibility varies by tax type and may be allocated between parties by contract, meaning statutory incidence, local custom, and contractual allocation can all differ.
Illinois imposes transfer taxes at the state, county, and home-rule municipal levels, each with its own statutory incidence. Additionally, parties may contractually allocate payment responsibility differently from the statutory default or local custom. Because these three frameworks — statute, custom, and contract — can all point to different payers, no single universal rule governs who pays in every transaction.
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Related Topics & Key Terms
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Related Concepts
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
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