With Evanston voters set to decide Feb. 5 whether to increase the real estate transfer tax, a local realtors’ group says city officials stacked the deck in comparing tax rates around the metro area in an informational brochure mailed to residents at taxpayer expense.
The brochure lists 11 Cook County communities with transfer tax rates ranging from $2 to $10 per $1,000 of the sale price, making it appear Evanston’s current $5 rate is in the middle of the pack.
But the brochure lists five of the seven towns with rates higher than Evanston and only four of the 22 communities with lower rates.
It also fails to mention that 65 percent of all Cook County municipalities impose no real estate transfer tax.
“The city’s comparison is blatantly deceiving,” says Howard Handler, government affairs director for the North Shore Barrington Association of Realtors.
“By picking and choosing several communities with abnormally high transfer taxes, the city is clearly trying to hide the fact that Evanston already has the highest transfer tax of any nearby suburb.” he added.
Sixteen months after voters rejected increasing the transfer tax to fund affordable housing programs, the city now wants to raise the tax 20 percent — from $5 to $6 per $1,000 of selling price — to cover a portion of the city’s underfunded public safety pensions.
Typically 1,000 to 1,250 single-family homes change hands in Evanston each year according to multiple listing association figures. With roughly 16,000 owner-occupied housing units in town, that means about 6 to 8 percent of home-owning households are hit with the tax each year.
Sales of rental properties are also taxed, and the realtors argue that those taxes will be passed on to tenants in the form of higher rents.
Handler challenged a statement attributed to Alderman Ann Rainey, 8th Ward, in last week’s Evanston Review that “99 percent” of the population wouldn’t be affected by the tax increase in any given year.
“The fact that an alderman believes the transfer tax will impact just one percent of Evanston residents demonstrates that either they are trying to deceive residents or don’t understand the tax themselves,” Handler said.
In addition to the city transfer tax, state and county real estate transfer taxes add $1.50 per $1,000 to the cost of selling real estate in Evanston.
(A list of real estate transfer tax rates across the region is available from the Chicago Title Insurance Company’s website.)
transfer tax
The flyer says “Information to help you make your decision.” But no alternatives are offered. How does one make a decision? There is only one rational response to an irrational (and irresponsible) proposition: NO!
The flyer is a blatant misrepresentation by the City Manager’s office (or whoever issued that flyer). As Mr. Handler points out “65 percent of all Cook County municipalities impose no real estate transfer tax.”
Is nobody being held accountable for this fiasco? Is this why the finance director quit (or was fired)? Interesting that no news about that has emerged.
why is chicago doing this for the RTA?
I want to know..
the city of chicago is trying to float a similar increase (even higher) to cover the pension shortfall for the CTA/RTA. Why won’t evanston’s increase cover that as well, when clearly Evanston has CTA and RTA transportation available?
Chicago transfer tax hike
The Chicago transfer tax hike idea was worked out in Springfield as part of the mass transit doomsday solution. Fortunately for Evanston taxpayers, raising the transfer tax in Evanston for that purpose seems to have never been part of the discussion.
Evanston/CTA
The reason is in the way the funds will be used. Evanston proposes to use the money generated to help make the annual, ongoing, payments to the plan. The CTA will use the money to leverage pension bonds which will immediately increase the funded ratio of the CTA’s pension and healthcare trusts. Also, while Chicago has lower home values, and therefore lower revenue per home, the sheer volume of transactions is much, much higher – generating comparably more money than Evanston can generate.