The Illinois real estate transfer tax starts at $0.75 for every $500 of the sale price, split between the state ($0.50) and the county ($0.25), and climbs from there in any municipality that adds its own layer. Chicago is the extreme case, where the combined rate reaches $6.00 per $500, or 1.2% of the sale price. To figure out what you’ll actually owe, you need three things: the sale price, the county, and whether your city or village charges a municipal transfer tax.
The Rate Layers That Apply to Your Sale
Illinois law imposes $0.50 in state transfer tax for every $500 of value, or fraction of $500, reported on the transfer declaration.1Illinois General Assembly. 35 ILCS 200/31-10 – Imposition of Tax Counties are authorized to add $0.25 per $500 on top of that.2Illinois General Assembly. 55 ILCS 5/5-1031 – County Real Estate Transfer Tax Every Illinois county does, so $0.75 per $500 is the effective floor on any taxable transfer.
Many municipalities layer their own tax on top, and the rates swing widely. Home rule cities (any municipality over 25,000 in population, plus smaller ones that opt in by referendum) draw their taxing authority from the Illinois Constitution and don’t need state approval to set a rate.3Illinois General Assembly. Illinois Constitution – Article VII – Section 6: Powers of Home Rule Units Non-home-rule communities face tighter limits. The practical result: two homes selling for the same price in neighboring towns can produce very different tax bills, so check your municipality’s current rate with the city or village clerk before closing.
How to Calculate the Tax
Both the state and county taxes use a “fraction thereof” rule: round the sale price up to the next $500 increment before applying any rate. A $300,250 sale is taxed as if it sold for $300,500. Municipal taxes follow the same rounding.
From there the math is straightforward:
- Round the sale price up to the nearest $500.
- Divide by 500 to get the number of increments.
- Multiply by each applicable rate ($0.50 state, $0.25 county, plus any municipal rate).
- Add the layers together.
Take a $350,000 home in an unincorporated area with no municipal tax. That’s 700 increments. State tax comes to $350, county tax to $175, for a total of $525. The same sale in Chicago would owe an additional $3,675 at the city’s $5.25 per $500 rate, bringing the total to $4,200.
Chicago’s Rate
Chicago imposes $5.25 per $500 of sale price, split into two components: a $3.75 “city portion” paid by the buyer and a $1.50 “CTA portion” paid by the seller.4City of Chicago. Real Property Transfer Tax The CTA portion, added in 2008, funds the Chicago Transit Authority.5American Legal Publishing Code Library. Chicago Municipal Code 3-33-030 – Tax Imposed Stack those on top of the state ($0.50) and Cook County ($0.25) rates and the combined bill is $6.00 per $500, or 1.2% of the price. On a $500,000 condo, that’s $6,000.
On a $600,000 Chicago sale, the seller’s share works out to $600 state, $300 county, and $1,800 CTA, for $2,700. The buyer owes the $4,500 city portion. Combined transfer taxes on the transaction reach $7,200.
Who Pays
Illinois law doesn’t explicitly assign the state and county transfer tax to the buyer or the seller. The statute requires revenue stamps on the deed before it can be recorded and leaves the question of who buys them to the parties. By custom across most of Illinois, the seller pays the state and county portions.
Chicago is the clear exception: the ordinance itself splits responsibility, with the buyer paying the $3.75 city portion and the seller paying the $1.50 CTA portion.4City of Chicago. Real Property Transfer Tax Other municipalities set their own allocations. Real estate contracts normally spell out who pays which portion, and if yours is silent the closing agent will usually follow local custom. Clarify it before you sign.
Transfers That Are Exempt
Not every deed triggers transfer tax. Illinois law lists several exemptions, and claiming one still requires marking the correct exemption code on Form PTAX-203 even though no tax is owed.6Illinois Department of Revenue. Instructions for Form PTAX-203, Illinois Real Estate Transfer Declaration The common ones:7Illinois General Assembly. 35 ILCS 200/31-45 – Exemptions
- Deeds where a federal, state, or local government entity is the buyer or seller.
- Transfers to or from entities organized exclusively for charitable, religious, or educational purposes.
- Deeds in lieu of foreclosure, where a borrower transfers the property back to the lender to satisfy the debt.
- Court-ordered partitions dividing jointly owned property.
- Corporate mergers, consolidations, or asset transfers under federal bankruptcy or tax reorganization plans.
- Any deed where the actual consideration is less than $100.
Even with a valid exemption, you must still file the declaration. County recorders will not accept a deed without one.
Filing Form PTAX-203
The Illinois Real Estate Transfer Declaration (Form PTAX-203) has to accompany the deed when it’s presented for recording, or be submitted within three business days of the transfer, whichever comes first.6Illinois Department of Revenue. Instructions for Form PTAX-203, Illinois Real Estate Transfer Declaration At least one buyer and one seller, or their attorneys, must sign it. The form asks for the full actual consideration, meaning the sale price plus any liens or mortgages the buyer is assuming.
You’ll also need the property’s parcel identification number (PIN), legal description, address, type of improvement, and lot size. Most of this is on your most recent property tax bill or the title commitment. The form is available through the Illinois Department of Revenue and county recorder offices. Without a completed PTAX-203, the recorder won’t record the deed, and the transfer doesn’t become official.
How Transfer Taxes Affect Your Federal Return
Transfer taxes are not deductible as real estate taxes on a federal return.8Internal Revenue Service. Publication 530, Tax Information for Homeowners They’re treated differently depending on which side of the deal you were on.
For a seller, transfer tax counts as a selling expense that reduces the amount realized on the sale, which can shrink a taxable capital gain or increase a deductible loss.9Internal Revenue Service. Publication 523, Selling Your Home For most primary-residence sellers the home sale exclusion ($250,000 single, $500,000 joint) already wipes out any gain, so the point is academic. On investment property or high-value homes it isn’t.
For a buyer, transfer tax paid at closing gets added to the property’s cost basis.10Internal Revenue Service. Publication 551, Basis of Assets A higher basis means a smaller taxable gain down the road. On a Chicago purchase where the buyer picks up the $3.75 city portion, that basis bump can matter years later.