It Ain't All Big Hair and Cadillacs

URGENT CALL TO ACTION

Please OPPOSE Legislation to Increase the State Real Estate Transfer Tax

Recently, two bills regarding the state transfer tax were introduced in the Illinois General Assembly, and IAR strongly opposes both bills-House Bill 728 and Senate Bill 445. These bills increase the state's transfer tax on a graduated basis. The current tax is $1 per thousand of property sale price; these bills increase the rate in the following manner:

For properties with a sales price of $500,000 to $1 million, the rate would be $3 per $1000;

For properties with a sales price of $1 million to $3 million, the rate would be $7 per $1,000;

For properties with a sales price of $3 million or more, the rate would be $10 per $1000.

For properties with sales prices less than $500,000, the tax would be slightly lowered from the current rate of $1 per $1000 to 80 cents per $1000.

The additional $99 million that is raised from this proposal would be allocated to the state's open lands acquisition and affordable housing trust funds-the same allocation that currently exists for revenue from the transfer tax.

We need your help in defeating this transfer tax increase! Please CALL your state legislator and urge opposition to this proposal. See attached list for the names of all legislators and their district phone numbers. (Both bills increase the state transfer tax in the same manner.)

We oppose this tax for the following reasons:

It's a tax increase on property. Property owners already pay more than fair share to fund municipal and state governments. In addition to the regular property tax payments, property owners pay transfer taxes at the local level.
Most home rule units in Illinois already collect a transfer tax; this state transfer tax is on top of those taxes. In some cities(Chicago included) the total transfer taxes would add up to 2% of the value of the property.

Because of the strong real estate market in the last 10 years, the transfer tax has brought in a significant amount of revenue-an amount that increases each year. Between 1996 and 2006, the revenue has increased by 300%! That's without ever increasing the rate; it's all natural revenue growth.

The affordable housing and open space funds were recently swept (in 2005) for other state budgetary purposes. This proposal amounts to a general tax increase.

While this proposal might be portrayed as a tax on "the wealthy," it's really a tax on small businesses, farms, apartment buildings and middle-class home sellers.

In some parts of the state, such a huge transfer tax could cause disinvestment, particularly with small businesses in areas that already have high property tax rates. Also, the rental housing stock, particularly in Cook County, would shrink as a result of this proposal. This is counter-productive in any effort to retain affordable rental housing.

In 2005, a new recordation fee of $10 on all property transfers went into effect. That revenue is for affordable rental housing, and now the same housing advocates are back asking for more money for sellers to pay.

While this proposal does include a small lowering of the tax on properties under $500,000, the state legislature can re-visit that rate anytime in the future, make a "slight increase"-back to the $1 rate--and that increase could be hard to stop.

The bottom line: Legislators should not turn to property owners who are already overburdened in this state with property taxes and transfer taxes.

Please contact your state legislators and urge them to vote "NO" on these proposals!Click the link below to log in and send your message:http://votervoice.net/target.asp?id=ilar:12199933