As you venture into the world of home buying in Illinois, there are various costs and taxes you should be aware of. One such cost is the Real Estate Transfer Tax.
As a title insurance agency, we routinely assist our clients in navigating these costs, ensuring a seamless and transparent property transfer experience.
What is the Real Estate Transfer Tax?
This tax is levied on the privilege of transferring title to real estate or a beneficial interest in real property that’s a part of a land trust in Illinois. Here’s a simpler breakdown:
- Tax on Property Transfer: Anytime you buy a property, and the title is transferred to you, this tax is applicable.
- Tax Basis: If the property has an existing mortgage, the tax is calculated only on the owner’s equity, not the outstanding mortgage amount. However, this should be explicitly mentioned on the deed or trust agreement.
How Does It Affect Home Buyers?
- Additional Cost: As a home buyer, you need to factor in this tax when budgeting for your property purchase. The exact tax rate can be found using the Tax Rate Database.
- Local Taxes: Apart from the state tax, counties have the authority to impose an additional tax of 25 cents per $500 of property value. If you’re purchasing in a home rule municipality, be prepared for another potential layer of real estate transfer tax.
- Documentation: Alongside other paperwork, the buyer and seller must complete Form PTAX-203, the Illinois Real Estate Transfer Declaration, and file it in the property’s respective county. If you’re eyeing a non-residential property priced over $1 million, you’ll need to also consider Form PTAX-203-A.
Our Role as a Title Insurance Agency
Your journey to buying a home involves multiple legal and financial processes. As your title insurance agency:
- Guidance: We’ll guide you through the specifics of the transfer tax, ensuring you understand the cost implications.
- Documentation: We’ll assist in ensuring all the required forms, like PTAX-203 and PTAX-203-A, are appropriately filled out and filed.
- Smooth Process: We work diligently to ensure that the title transfer process is smooth and that all taxes and fees are transparently communicated and handled.
Navigating the Real Estate Transfer Tax
Purchasing a home is a monumental step, and understanding the associated costs, like the Real Estate Transfer Tax, is crucial. As your trusted title insurance agency, we’re here to guide you every step of the way, making your home buying journey clear and confident.
For more information or questions about the Real Estate Transfer Tax or any other aspect of your home buying process, feel free to contact Plymouth Title Guaranty Corporation.