Residents across the United States know that taxes are part and parcel of today’s world. The income generated through taxation may often fund important infrastructure efforts and programs. However, it is important that taxes be fairly assessed and understood by those who must pay them.
When it comes to residential property in Illinois, a special tax assessment may occur when the title to a property transfers from one owner to another.
Understanding real estate transfer taxes in Illinois
As explained by the Illinois Department of Revenue, counties across the state must purchase revenue stamps from the state government. The counties then sell these stamps to property buyers when a property title transfer occurs, resulting in the collection of the real estate transfer tax.
Tax rate and assessments
Real estate transfer tax rates may be $0.25 for every $500 of assessed property value. Property holders should know that the full value of the property may not be used for determining their tax liability. Instead, only the value of their equity may direct this tax, eliminating mortgaged value from the equation. In addition to an assessment by the county in which the property exists, a municipality may also assess a transfer tax on the event.
Counties as well as the individuals involved in the title transfer may need to file paperwork for this transfer.
This information is not intended to provide legal advice but is instead meant to give homeowners or people looking to buy their first home an overview of one tax they may need to pay when transferring the title of a property in Illinois.