Close Before April 1 and Pay Less in Real Estate Transfer Tax
By now you’re probably aware that the real estate transfer tax increase was approved by city alderman this past week to alleviate the CTA money crunch. The revised law raises the tax amount homebuyers pay on their new
The payoff for closing either this month or in March is considerable – a 40% savings on realty transfer tax to complete the sale prior to the first of April. Say, for example, you buy a $250,000 home in the next six weeks… you would owe $750 less in taxes than if you waited and bought the real estate after the tax hike. This is money needed upfront, not something that can be financed and paid over time. So the disparity is important to consider, especially for active searchers that have been dragging their feet looking at homes for awhile… now’s the time to make that decision and go forward with the deal! It will spare you hundreds of additional dollars in closing day costs.
Homebuyers 65 years of age and older will receive a cash refund for the difference when they purchase a place of up to $250,000, as long as they agree to live in the property for a minimum of one year. But this special group of homeowners must apply for the reimbursement to get the money back, so again the cash must be in-hand, in full in order to buy the property.
If you’re one of those potential buyers on the fence or someone in the process of negotiating the purchase of a home, there is plenty of time to get in before the tax increase takes place. Talk with your current Realtor or call a
There is talk of moving some of the new real estate transfer tax cost over to the sellers, that way both parties would share the additional expense. However, a revision of that kind would need to be proposed and approved by City Council.
Posted at 09:13AM Feb 12, 2008 by Spencer Mason in General Comments[0]
