The conveyance in Illinois is taxed as a result of the Illinois Real Estate Transfer Tax Act. The amount subject to taxation is the sales price minus any assumed mortgage or mortgage taken “subject to.”

State tax – $0.50 per $500 or fraction thereof,
County tax – $0 .25 per $500 or fraction thereof

If the total amount of consideration is less than $100 no tax is required.

  1. A property sold for $125,000. The purchaser assumed a mortgage on the property in the amount of $37,450. What is the total amount of transfer tax?

Solution Step 1-Sales price minus assumed mortgage = taxable amount
Calculation – $125,000 – $37,450 = $87,550

Solution Step 2 — Taxable units = Each 500 and then any Fraction of 500
Calculation – $87,550/500 = 175 plus another unit for the $50 left over = 176 units

Solution Step 3 — State Tax = Number of Units x $0.50
Calculation — 176 x $0.50 = $88.00

Solution Step 4 = County Tax = Number of Units x $0.25
Calculation — 176 x $0.25 = $44.00

Solution Step 5 — Total Transfer Tax = State Tax plus County Tax.
Calculation = $88.00 + 44.00 = $132.00
Answer: $132 total amount of transfer tax