Chicago Transfer Tax Explained For Downtown Buyers

Buying a condo in Downtown Chicago? One closing cost that can surprise you is the real estate transfer tax. It is a one-time tax due when a deed is recorded, and it affects your cash to close. With the right guidance, you can plan for it, negotiate it, and avoid last‑minute delays. In this guide, you’ll learn what the tax is, how it’s calculated, who pays it, common exemptions, and when to loop in a professional for exact numbers. Let’s dive in.

Transfer tax, simply explained

A transfer tax is a tax charged when ownership of real property changes hands and the deed is recorded. It is not the same as property tax. You pay it once at closing when the deed is submitted for recording.

In Downtown Chicago, transfer taxes can come from more than one place. The City of Chicago and Cook County each have their own transfer taxes that are collected at recording. Illinois may have state-level rules as well, so confirm current applicability with your title company or attorney.

Where it applies in Chicago

Most downtown condo purchases will involve two layers: a City of Chicago transfer tax and a Cook County transfer tax. These taxes are assessed on the consideration stated on the deed or required forms, typically the purchase price.

Title companies or closing attorneys collect the tax at your closing and remit it when the deed is recorded. If transfer tax is not paid, the deed will not record, which can delay title transfer, possession, and your lender’s mortgage recording.

How to calculate your tax

Here is the simple framework you can use.

• Transfer tax for each jurisdiction = rate × purchase price
• Total transfer tax = (City rate + County rate [+ State rate if applicable]) × purchase price

A useful mental rule: add all applicable rates together, then multiply by your purchase price. Your title company will handle rounding per the forms.

One-row calculator

• City transfer tax: [current City rate] × purchase price
• County transfer tax: [current County rate] × purchase price
• Total estimated transfer tax: (City rate + County rate) × purchase price

Example setup for a downtown condo: If your purchase price is $750,000, multiply that price by the current City rate and the current County rate, then add the two results. Confirm the latest rates with your title company, closing attorney, or the official City of Chicago and Cook County pages.

Who pays in downtown condo deals

Legally, transfer taxes are due when the deed records, but who pays is set by your purchase contract. In Chicago, it is a negotiable item. The parties can agree that the buyer pays, the seller pays, or that the cost is split.

Your contract and any counteroffers control the final allocation, so check that language closely. Ask your agent or attorney for an estimated closing statement that shows exactly who pays which transfer tax line items. If you are buying new construction, developers sometimes handle transfer taxes differently, so review the contract details.

Exemptions and special cases

Some transfers qualify for exemptions. Common categories can include transfers between spouses, certain transfers under court order, transfers involving qualifying governmental or nonprofit entities, transfers with nominal consideration or gifts, and transfers into or out of certain trusts. Rules are specific, and proof is required.

Exempt transactions usually require affidavits and supporting documents submitted at recording. Bring any relevant documents, such as court orders or organizational proof, to your title company early so they can confirm eligibility and prepare the correct forms.

Note that condo association fees related to a sale are separate from governmental transfer taxes. Association move-in, move-out, or transfer fees do not replace city or county transfer taxes.

Filing, collection, and timing

• Who collects: Your title company, attorney, or escrow agent collects transfer taxes at closing and remits them with the recorded deed.
• Where it shows up: You will see transfer tax line items on your Closing Disclosure (or HUD‑1 where used), allocated between buyer and seller per the contract.
• Cash to close: If you are responsible for all or part of the transfer tax, it increases your cash to close. Lenders typically require transfer taxes to be paid at or before closing.
• Timing matters: If transfer taxes are not paid, recording is delayed. That can affect possession timing, condo board processing, and loan funding logistics.

Buyer checklist for a smooth closing

• Confirm in writing who pays the transfer tax under your contract.
• Request an estimated Closing Disclosure or HUD‑1 showing transfer tax line items.
• Ask the condo association about any separate transfer or move fees.
• Get the title company’s contact information and confirm they will collect and remit taxes.
• For new construction, ask the developer exactly how transfer taxes are handled.
• If you think an exemption may apply, provide documents to your attorney and title company early.

Quick estimate worksheet

Use this to draft a ballpark estimate before you receive your closing statement.

1. Write your purchase price: $__________
2. Find the current City transfer tax rate: ________%
3. Find the current Cook County transfer tax rate: ________%
4. Add the rates: City ________% + County ________% = Total ________%
5. Multiply purchase price by Total rate: $__________ × % = $__ estimated transfer tax

This is an estimate only. Your title company and attorney will confirm the latest rates, any state-level rules, and the exact amount due at recording.

If you would like a precise estimate and guidance on negotiating who pays what in your downtown condo purchase, reach out for a private conversation. As a senior advisor with deep experience in both the Western Suburbs and Downtown Chicago, I will coordinate with your attorney and title team to give you clear numbers before you sign and a smooth path to closing. Connect with Rachna Jain to Request a Private Consultation.

FAQs

What is the difference between city and county transfer tax?

• The City of Chicago and Cook County each impose their own transfer tax when a deed is recorded; they are separate charges that are added together on your closing statement.

How can I estimate my transfer tax before closing?

• Add the current City and County rates together and multiply by your purchase price; your title company can confirm the latest rates and provide an exact figure.

Who usually pays transfer taxes on Chicago condo sales?

• Payment is negotiable and controlled by your purchase contract; the buyer, seller, or both can agree to cover the tax.

Are there exemptions for first-time buyers or family transfers?

• Some categories, like certain spousal or court‑ordered transfers, may qualify, but exemptions are specific and require proper documentation at recording.

Will my lender pay transfer taxes for me?

• No; transfer taxes are typically collected by the title company and paid at or before closing, and they increase your cash to close if you are responsible.

How do condo association fees relate to transfer tax?

• Association move-in, move-out, or transfer fees are separate from governmental transfer taxes and will appear as distinct line items on your closing statement.

Where can I get an exact transfer-tax number before I sign?

• Ask your agent, attorney, or title company for an estimated Closing Disclosure that lists current City and County transfer tax amounts and who is paying each line.