Buying or selling in West Town and wondering how Chicago’s transfer taxes work? You are not alone. These charges can look confusing on a closing statement, especially when multiple layers stack up. In this guide, you’ll learn which taxes usually apply in West Town, who typically pays, common exemptions, and a simple way to estimate your costs. Let’s dive in.
What the transfer tax covers
A transfer tax is charged when real property changes hands. In West Town, you are inside the City of Chicago and Cook County, so several layers can apply. Each tax or fee is separate on your closing statement, and your purchase contract determines who pays what.
Which taxes apply in West Town
Illinois state transfer tax
The State of Illinois imposes a real estate transfer tax. Confirm the current statewide rate and rules before you close. Your title company or attorney can help you verify the correct calculation for your deal.
City of Chicago transfer tax
The City of Chicago charges a real property transfer tax that generally applies to West Town sales. The city sets the rate and publishes payment procedures and exemption forms. Check the current rate as part of your closing prep.
Cook County recording and related fees
Cook County collects recording fees for the deed and, if applicable, mortgage documents. These fees are separate from transfer taxes and are usually shown as distinct line items on the Closing Disclosure or HUD-1.
Special districts or surcharges
While uncommon for transfer tax, certain local programs or assessments can apply in specific cases. Your title company will flag any special items tied to your property or transaction.
Who pays in a Chicago deal
Legal obligation vs. contract
Transfer taxes are triggered by the conveyance of real property. The purchase contract allocates who pays each tax or fee. Local custom can influence expectations, but the contract controls.
Common practice in Chicago closings
- City or municipal transfer taxes are sometimes paid by the seller or split, but it varies with market conditions and negotiation.
- State transfer tax and county recording fees are commonly treated as seller costs in many Illinois deals, though this can be negotiated.
- Mortgage-related recording fees are typically paid by the buyer.
Confirm the allocation with your agent, attorney, or title company early, then review the closing statement to ensure it matches the contract.
How it appears on your closing statement
The Closing Disclosure or HUD-1 lists each tax and fee separately. You will see the payer for each item and the exact amount, which should align with the contract terms and current rates.
Exemptions and exceptions to know
Common statutory exemptions
Depending on your facts and documentation, certain transfers can be exempt or treated differently. Examples include:
- Transfers between spouses, certain divorce-related conveyances, and some trust transfers
- Transfers by will or intestate succession
- Transfers to or from governmental units or certain nonprofits
- Bona fide gifts where no consideration is exchanged
- Some foreclosure or tax deed transactions
Practical situations to verify in West Town
- First conveyance of new construction can be treated differently in some places. Confirm how Chicago handles new-construction transfers.
- Affordable housing or redevelopment program transactions may have special rules or exemptions.
Documentation you may need
Exemptions usually require signed forms or affidavits and proof such as trust documents, a marriage certificate, or distribution instruments. Your title company will prepare the correct forms and tell you what to bring to closing.
How to calculate the taxes
Simple framework you can use
- Step 1: Identify each jurisdiction that applies in West Town: Illinois, City of Chicago, and Cook County recording.
- Step 2: Confirm the taxable consideration. This is often the purchase price and may include assumed mortgages or other consideration depending on the rules.
- Step 3: Apply the rate or per-unit formula for each jurisdiction.
- Step 4: Add up the taxes and fees, then apply the buyer and seller allocations per your contract.
Formula:
- For each jurisdiction j: Tax_j = Taxable_Consideration × Rate_j
- If a per-unit formula applies: Tax_j = ceil(Taxable_Consideration ÷ Unit) × UnitFee
- Total transfer tax = sum of all Tax_j
Hypothetical examples for illustration
The following are sample calculations with hypothetical rates. Use them to understand the math, then confirm current rates for your transaction.
Example A: West Town condo, sale price $450,000
- State tax (hypothetical): 0.10 percent → $450,000 × 0.001 = $450
- City tax (hypothetical): 0.75 percent → $450,000 × 0.0075 = $3,375
- County recording fees (hypothetical): $200
- Total (example): $4,025
- Allocation example: seller pays state + city = $3,825, buyer pays recording = $200
Example B: West Town single-family, sale price $900,000
- State tax (hypothetical): $900,000 × 0.001 = $900
- City tax (hypothetical): $900,000 × 0.0075 = $6,750
- County recording fees (hypothetical): $300
- Total (example): $7,950
- Allocation example: seller pays state + city = $7,650, buyer pays recording = $300
What counts as consideration
Many transfer tax rules include more than the cash price. Assumed mortgages, liens released, or other value exchanged to induce the transfer may count as consideration. Your title company can help you confirm the correct taxable amount for each jurisdiction.
How to verify current rates and forms
Use official sources to confirm details before you sign your contract or finalize closing numbers. Look up:
- City of Chicago Department of Finance pages for Real Property Transfer Tax rates, forms, and payment process
- Illinois Department of Revenue guidance on the state real estate transfer tax, definitions of consideration, and exemptions
- Cook County Recorder of Deeds for recorded deed images and consideration, plus the Cook County Clerk for recording fees
Ask your title company for a written estimate of transfer taxes and recording charges based on your price and the agreed allocation.
West Town closing checklist
Before you go under contract
- Decide on the buyer and seller split for transfer taxes and recording fees
- Confirm whether an exemption could apply, and gather documents early
- Ask your title company or attorney for a preliminary estimate of transfer taxes and fees
During attorney review and prior to closing
- Verify the correct taxable consideration and current rates for Illinois and Chicago
- Ensure exemption forms and affidavits are completed if applicable
- Review the draft Closing Disclosure to confirm each tax and fee is allocated per the contract
At and after closing
- Double-check that transfer taxes match the agreed consideration and correct rates
- Collect proof of payment and recording receipts
- Keep copies of the recorded deed, instrument number, and all tax receipts for your records
Work with a local expert
Understanding who pays and how much is key to negotiating a clean deal in West Town. From confirming current rates to setting the right allocation in your contract, a local team helps you avoid surprises and keep your timeline on track. If you want a clear estimate tailored to your property and strategy, connect with Jason O'Beirne. Schedule a consultation.
FAQs
What is the Chicago transfer tax for West Town buyers and sellers?
- It is a real property transfer tax charged by the City of Chicago, layered with the Illinois state transfer tax and Cook County recording fees that apply to West Town transactions.
Who typically pays the Chicago transfer tax in a West Town sale?
- The purchase contract decides the allocation. Local practice sometimes has the seller paying city and state portions while the buyer pays mortgage recording fees, but it can be negotiated.
How do I estimate my transfer tax before making an offer in West Town?
- Identify all layers that apply, confirm the taxable consideration, apply the current rates for each jurisdiction, and total them. Your title company can provide a written estimate.
Are any West Town transactions exempt from transfer tax?
- Certain transfers can be exempt or treated differently, such as some spousal or trust transfers, estate transfers, bona fide gifts, and some nonprofit or government-related transactions, with proper documentation.
What documents do I need to claim a transfer tax exemption in Chicago?
- Expect to complete specific exemption forms or affidavits and provide supporting proof, such as trust documents or a marriage certificate. Your title company will prepare and collect these at closing.
Where will I see transfer taxes on my closing paperwork?
- Transfer taxes and recording fees appear as separate line items on your Closing Disclosure or HUD-1, with the paying party clearly identified per your contract.
