Tuesday, March 24, 2015

new revenue for Chicago, taxing sales of some homes

Because City of Chicago is in debt to its pension funds, Chicago needs new revenue.

The following proposal will bring some revenue and it should be passable.

Tax sales of homes (properties that have taken the "homeowners exemption" which saves $250-2,000/year).

Here's the catch: if the owner buys another home in Chicago (residential property where owner qualifies for and takes homeowner exemption) the owner gets 100% of the tax rebated. Also, if the homeowner lives there for 20 years or longer, the sale would be exempt from taxation.

How much would the tax be?

1% on value up to $250,000 of sale price
1.5% on value between $250-500,000 of sale price
2% on value between $500K- $1 million
4% on value between $1-2 million
8% on value over $2 million

There would be a step down for people who owned the property over 16 years.

If property owned:
16 years ==> only 80% of the tax paid
17 years ==> only 60% of the tax paid
18 years ==> only 40% of the tax paid
19 years ==> only 20% of the tax paid

The tax would not apply to seniors that have lived in Chicago for 20+ years and downsized to a more modest priced home in the last twenty years.

If an owner sells a home and then rents in Chicago, s/he would get the tax rebated one third at a time at the 12, 24 & 36 month points, if s/he still maintains her/his legal residence in Chicago.

This tax would apply to the heirs of an estate, even if the deceased did live in Chicago for 20+ years.

Tuesday, March 10, 2015

reforming evictions in Illinois: having government sell eviction insurance

Recently two bills have been introduced in Illinois General Assembly to make evictions suck more for the tenants. Sen. Thomas Cullerton (D-Villa Park) introduced SB 0871, to expand who can conduct evictions from county sheriffs to all peace officers and private detectives. Rep. Andre Thapedi (D-Chicago Ward 6) introduced HB 0160, which makes at least three changes to Illinois law that harms the tenants interests (functionally making eviction more likely to happen and to make it happen faster).

While it may be emotionally satisfying to make evictions more punitive to tenants, the interests of the landlord/property manager are usually served by getting the tenant out expeditiously (or coming to an agreement), not making the process more punitive for the tenant.

What could help the landlord and the tenant? Eviction insurance.