Home Rule and the Real Estate Transfer Tax

**Updated July 31 at end of post.**

Believe it or not, there’s at least one limit to Illinois Home Rule! Here’s a post from the blog of the Illinois Association of Realtors:

I was discussing a transaction in the home rule community of West Frankfort. “My client was surprised to learn at closing she had to pay a fee of 1 percent of the sale price to the city—which meant $1,200 out of her pocket,” the REALTOR® said.

Surprised by the transfer tax, I began researching the history of the real estate transfer tax. The Village of West Frankfort passed a referendum in 2006 making it a home rule community. In 2008, citing their home rule status, the council passed an ordinance creating a transfer fee on the transfer of leases surrounding the city-owned lake. Illinois Association of REALTORS® (IAR) Legal Counsel found that under state law before they implement a transfer tax, the question must be put on the ballot for referendum for voters to decide.

The IAR reportedly wrote a letter to the City of West Frankfort explaining this and now awaits a reply.

I’m pretty sure that if the tax were legal without a referendum, the City of DeKalb would be collecting it already. Continue reading Home Rule and the Real Estate Transfer Tax