Chicago Transaction Tax

Real Property Transactions
Ruling #87-1
Subject: Transfers subject to tax
Effective Date: February 1, 1987

Section 1. Under Sections 200.1-1A7 and 200.1-2B as amended, any transaction for consideration, involving the transfer of ANY title to, or beneficial interest in, real property within the City of Chicago, whether or not the agreement or contract to transfer such is entered into in the City, is subject to the Chicago Transaction Tax.

Section 2. A beneficial interest is any use of, benefit in or advantage over real property as distinct from the legal title ownership. A beneficial interest also includes any equitable interest of a beneficiary under a trust the corpus of which is or includes real property. Further, under Section 200.1-2B, as amended, a beneficial interests in real property are included a lease or license to use land in which no ownership is transferred but only temporary enjoyment is given.

Section 3. An assignment of beneficial interest in real property shall mean any document transferring, assigning or conveying a beneficial interest in real property.

Section 4. Application of Section 200.1-2B is illustrated by the following:

1. When real property, within the City of Chicago is held in an Illinois land trust, the transaction is subject to tax upon delivery or recordation of the deed. This is not apply when the transferor is transferring the property to a land trust for himself, as beneficiary, and no consideration for the property is transferred.
2. When there is an assignment of beneficial interest in real property, located in the City of Chicago, that is held in an Illinois land trust or other trust, the transaction is subject to tax, upon the delivery or recordation of such assignment.

Section 5. Sections 200.12B7 and 200.1-4, as amended list transfers exempt for taxation. Examples include:

1. The transfer of title to, or beneficial interest in, real property located in a Enterprise Zone, as defined in Chapter 201 of the Municipal code of Chicago.
2. The transfer of a land trust by one trustee to a succeeding trustee whose duty it will be to administer the same land trust.
3. The transfer by or from governmental bodies. As to transfers by governmental bodies, this only applies to actual transfers of property owned by the governmental body. Deeds or other transfers effectuated by Sheriff’s deeds or otherwise by court order are not included in this exemption.

Section 6. The mere entering into contracts or articles of agreement are not taxable transaction since the agreements themselves do not purport to transfer any title to or beneficial interest in real property. However, when a deed or assignment of beneficial interest is delivered pr recorded, in completion of the contract or agreement, a taxable transaction does occur.