The Chicago City Council passed a resolution 32-17 yesterday that places an increase to the city’s real-estate transfer tax on the primary ballot in March.
STATEMENT from the
ILLINOIS POLICY INSTITUTE
CONTACT: Micky Horstman (312) 607-4977
Statement from Paul Vallas: Chicago puts commercial real estate transfer tax hike on ballot
CHICAGO (Nov. 8, 2023) – The Chicago City Council passed a resolution 32-17 yesterday that places an increase to the city’s real-estate transfer tax on the primary ballot in March. Chicago residents will decide the fate of the measure – pushed by Mayor Brandon Johnson to combat homelessness – to raise taxes on properties valued at over $1 million, such as commercial properties and apartment buildings.
Sold as a tax hike on wealthy Chicagoans, opponents fear the tax hike will hinder Chicago’s real-estate and business market and discourage commercial property sales – which are the bulk of the sales in that price range.
Paul Vallas, policy adviser for the Illinois Policy Institute, offered the following statement:
“Let’s be clear, this is being sold as a ‘mansion tax,’ but it will fall overwhelmingly on hard-pressed commercial property owners whose property values are already plummeting.
“Businesses in the city already pay the second-highest commercial property tax rate in the country, as well as the second-highest real estate transfer taxes. Chicago is facing record-high office vacancy rates and a business exodus. Instead of addressing the causes of these problems, Mayor Johnson insists on further punishing the businesses and residents who haven’t left.
“Chicago’s affordable housing crisis can be addressed without raising taxes on commercial property owners by unleashing the potential of the housing market and by removing obstacles to affordable housing. Solutions include: dedicating tax increment financing dollars to support affordable housing, converting unimproved spaces to garden units, securing the tens of thousands of unoccupied homes and apartments, and streamlining the process for securing permits and zoning approval for new housing.
“If passed, the hikes to the real estate transfer tax will just be the first of many to come. As commercial property values fall, the tax burden will inevitably shift to homeowners. The truth is clear for those who can see through the propaganda: this is a commercial tax hike on businesses already struggling, and for an undefined program. Homeowners will be next.”
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