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On July 24, City Council approved a referendum question that will appear on the Nov. 6 ballot and ask voters to approve a graduated increase in the real estate transfer tax. Currently, the transfer tax is $5 for every $1,000 of the sale price of real estate, or fraction thereof. The tax is paid entirely by the seller. For example, if the sales price of a house is $300,000, the transfer tax is $5 x 300 = $1,500.
Under the City’s proposal the transfer tax will be kept at $5 per $1,000 on sales prices up to $1.5 million; and the tax will increase on amounts more than $1.5 million. The tax will be $7 per $1,000 on the amount between $1.5 million and $5 million; the tax will be $9 per $1,000 on the amount more than $5 million.
The entire transfer tax will be paid by the seller.
The increased amount will be dedicated to the City’s General Operating Fund to improve public safety, public health, parks and recreation services, street improvements and other necessary services.
The City’s budget documents for the year 2019 indicate that the City anticipates the increase, if approved, will generate $850,000 in additional revenues for the year and will continue to generate revenue each year.
The question that will appear on the ballot is as follows:
“Shall the City of Evanston impose a real estate transfer tax increase of forty percent (40%) to establish a new transfer tax rate of seven dollars ($7.00) for every one thousand dollars ($1,000.00) of value, or fraction thereof, for sales from $1,500,000.01) up to $5,000,000.00 AND a real estate transfer tax increase of eighty percent (80%) to establish a new transfer tax rate of nine dollars ($9.00) for every one thousand dollars ($1,000.00) of value, or fraction thereof, for sales from $5,000,000.01 or more to be paid by the seller of the real estate transferred?
“The current rate of the real estate transfer tax is five dollars ($5.00) for every one thousand dollars ($1,000.00) of value, or fraction thereof, and the revenue is used for the City’s general fund. The revenue from the increase is to be used for the funding of the City’s General Operating Fund, with the increase being used for improvements related to the public safety, public health, parks and recreation services, street improvements, and other necessary City services.”
This is a binding referendum. Should it pass, the City will impose the new real estate transfer taxes.