Transfer Tax Stamps
The Illinois Real Estate Transfer Act imposes:
- a state tax on conveying title to real estate in the amount of $0.50 per $500, or fraction thereof
- in all Illinois counties, there is an additional transfer tax of $0.25 per $500, or fraction thereof
- Total transfer tax to state and county combined is $0.75 per $500 or fraction thereof.
The transfer tax must be paid before the recording of the deed (or before transferring the beneficial interest in a land trust). This is done by purchasing tax stamps from the county recorder or the city offices if there are local stamps required. These stamps are literally affixed to the deed.
Local transfer tax Many local municipalities have their own tax as well. Charts indicating these local transfer tax amounts are available from counties and individual municipalities. Local transfer tax can be paid by either buyer or seller, so it is important to check each municipality.
Tax formula The formula used in Illinois to determine the exact taxable consideration is as follows:
Full actual consideration (sales price)
Less value of personal property included in purchase
Less amount of mortgage to which property remains subject
Equals net TOTAL taxable consideration to be covered by stamps
Amount of Illinois state tax stamps ($.50 per $500 or taxable amount)
Amount of county tax ($.25 per $500) Total transfer tax
Real Estate Transfer Declaration
In Illinois, the sale price must be shown on the Real Estate Transfer Declaration form. The form must be signed by the buyer and seller or their agents, and it provides for the inclusion of the property description, manner of conveyance, and type of financing used. The financing data helps the Department of Revenue accurately determine equalization factors between different counties and eliminate inconsistencies caused by the use of nonconventional or creative financing.
A completed declaration must accompany every deed presented to the recorder for recording. (The Cook County Recorder’s office has its own separate transfer form, which also must be presented with every deed.) The information contained on the form is not confidential and is available for inspection by the public.
Exempted from the transfer tax are:
- deeds such as those conveying real estate from or between any governmental bodies,
- those held by charitable, religious, or educational institutions,
- those securing debts or releasing property as security for a debt,
- tax deeds,
- deeds pursuant to mergers of corporations,
- deeds from subsidiary to parent corporations for cancellation of stock,
- deeds subject to federal documentary stamp tax.
When the actual consideration for conveyance is less than $100, the transfer is considered a gift and is exempt from tax. An exemption statement is usually typed on an exempted deed and signed before the deed is recorded.
Tax stamps and land trusts Under the Land Trust Recordation and Transfer Tax Act, a land trustee has the obligation to record a facsimile of the assignment of beneficial interest. The names of the beneficiaries need not be disclosed, and privacy is maintained. The transfer tax rate and the exemptions are the same for the assignment as for the transfer of real property.
Title to property may be transferred without the owner’s consent by involuntary alienation. Involuntary transfers are usually carried out by operation of law such as by condemnation or a sale to satisfy delinquent tax or mortgage liens. When a person dies intestate (without a will) and leaves no heirs, the title to the real estate passes to the county (in Illinois) by the state’s power of escheat. Additional land may be acquired through the process of accretion or lost through erosion, and other acts of nature, such as earthquakes, hurricanes, sinkholes, and mudslides, may add to or eliminate a landowner’s holdings.