In January 2008, Governor Blagojevich and the Illinois General Assembly enacted Public Act 095-0708 to provide funding for the Chicago Transportation Authority ("CTA") and the Regional Transportation Authority.  The law increased the sales tax in Cook County by .25% and the sales tax in the six collar counties by .5%.  The law also authorized the City of Chicago to increase the tax on transfers of real property in the City or adopt an additional transfer tax to provide further funding for the CTA without requiring the increase to be approved by a referendum as required by state law prior to enactment of the new law. 

On February 6, 2008, the Chicago City Council amended its existing real property transfer tax ordinance to increase the rate of tax from $7.50 per $1,000 of value to $10.50 per $1,000 of value, a 40% increase in the tax rate.  The increased rate will be effective for transactions occurring on or after April 1, 2008. 

An individual 65 years of age or older purchasing property valued at $250,000 or less who can demonstrate to the City that he or she will occupy the property as his or her principal residence for at least one year should receive a refund if he or she applies for such refund within three years of the purchase.  For all other transfers, the additional funds generated by the increase after deduction of collection costs are to be paid to the CTA. 

The Chicago transfer tax is payable by the buyer of real property in the City of Chicago.  This tax is in addition to the State transfer tax of $1.00 per $1000 and the Cook County transfer tax of $.50 per $1,000 which are payable by the seller of real property.  The increase in the City transfer tax rate is projected to provide the CTA $63 million in 2008 and $84 million in subsequent years.