A buyer closing on a Chicago property pays the Chicago city real estate transfer tax and believes no Illinois state real estate transfer tax is owed on the same deed. Which statement best describes the accuracy of that belief under Illinois law?
Correct Answer
A) The belief is incorrect because Chicago's city transfer tax is a separate, additional obligation that stacks with the Illinois state transfer tax; paying one does not satisfy the other.
Illinois imposes a statewide real estate transfer tax under 35 ILCS 200/31-1 et seq. at $0.50 per $500 of value. Chicago separately imposes its own transfer tax under its home-rule authority granted by the Illinois Constitution (Art. VII, Sec. 6). Because these taxes arise from independent legal authorities, both apply to the same Chicago deed. The city tax does not substitute for, offset, or waive the state tax obligation.
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Related Topics & Key Terms
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Related Concepts
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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TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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