Recently there has been some talk about the Real Estate Transfer tax in Naperville. This tax is one of several taxes that become part of the general fund that pays for the city’s operating expenses and has been around for as long as I can remember in Naperville.

There was talk a few years ago about raising this tax but the concern is that increasing it could negatively effect home sale in Naperville. If you eliminate this tax that would mean the city would have to increase another tax to make up for this lost revenue and that usually means raising property taxes. I believe higher annual property taxes would have a greater negative impact on Real Estate sale then is one time tax so keeping it is the lesser of two evil.

2 comments

  1. Tom Laz - Reply

    Jim, not sure if all of your readers know how this works. When there is a transfer of title to real estate, there is a transfer tax which goes half to the State and half to the County. It is paid usually by the seller based on, last l know was about $1 per thousand dollars of price. Then Naperville some time ago added its own transfer tax which is a buyer’s tax, i.e. a fee paid on top of what the buyer is paying, absent some agreement between the parties. The contract provides that the seller provide a recordable deed and no tax stamps, no recording. And at closing, figures are moved about and there is provision for the escrow agent to withhold funds to purchase the stamps so the deed can be recorded. So, yes there is a one time tax when you buy in the City but again, operant word is ONE TIME. And you are correct on the other aspect. If you do away with this ONE TIME tax, it creates a hole in the budget. The answer, make cuts to whatever department OR, raise some other tax(es) on the citizens to make up for the loss. I don’t think the buyer’s tax will prevent people from buying here. There is good reason for them to buy here and the buyer’s tax will not dissuade anyone, and again, it is a ONE TIME tax as opposed to a regular and recurring tax on the rest of the City. So, keep the transfer tax.

    • admin - Reply

      Good point. It is not clear in my post this is a one time tax that only occurs when the property is sold.

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