On Tuesday, voters in Evanston approved the referendum asking if the transfer tax should increase for higher priced homes. Currently, sellers in Evanston pay $5 for every $1,000 of the sale price. The referendum asked to move homes selling from $1.5 million to $5 million to $7 per $1,000 and homes selling for more than $5 million to $9 per $1,000. The measure passed with a vote of roughly 17,000 in favor and 15,500 against.
It’s important to note a referendum does not change the rule, but reflects the public opinion so politicians know how to proceed. Given the majority in favor, we should expect to see the measure brought up at the next City Council meeting.
The idea of a “Mansion” tax has been gaining traction in many areas where new construction and sale prices are rising. Most notably, a one time tax of 1.2% of the purchase price paid by the buyers of Chicago properties over $1 million was proposed but shot down by Mayor Emanuel. This was in addition to the 1.05% transfer tax Chicago buyers already pay. The approval by Evanston voters will likely open the door for other Cities and Villages to consider the revenue generating measure.
This is an issue we will continue to monitor for our clients.