A buyer pays Chicago's city transfer tax on a residential property closing within city limits. Which of the following correctly describes how Chicago's city transfer tax relates to the Illinois state transfer tax?
Correct Answer
D) Chicago's city transfer tax is a separate, additional layer of taxation that stacks with the Illinois state transfer tax and any other applicable local transfer taxes.
Under 35 ILCS 200/31-10, Illinois imposes a state real estate transfer tax on every conveyance of real property. Chicago's city transfer tax is imposed separately under Chicago Municipal Code § 3-33, which was enacted pursuant to Chicago's home-rule authority. These are independent taxing regimes with different rates, different payer obligations (buyer and seller portions differ at each level), and different administering bodies. Paying one does not satisfy or offset the other — both apply to the same deed, causing the taxes to stack.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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