Even though 17 Chicago suburbs underestimated a total of nearly $5.6 million in real estate transfer tax revenue during the most recent fiscal year, a Daily Herald article asserts the approach keeps taxes high and doesn’t allow many opportunities to give affected taxpayers tax relief.
The situation pits town officials against watchdog groups who believe more accurate budgeting should be done. According to the Daily Herald article by Jake Griffin, officials estimate real estate transfer tax revenue conservatively because home sales are hard to predict and the amount collected depends on selling prices. Critics wonder if towns are spending enough time and energy to estimate accurately.
A home valued at $300,000, for example, usually results in a real estate transfer tax of approximately $900, and it is often paid by the seller, the article states.
Naperville and Glen Ellyn are two examples of towns that received more revenue than budgeted in the most recent fiscal year, while Addison and Hanover Park got less. Some towns put the unexpected revenue in their general fund while others use it to pay for capital improvement projects, the article stated. Home rule suburbs used to be able to charge the tax but now must get voter approval to do so.
Thanks to Government Affairs Director Howard Handler for calling attention to the article.