Understanding Cook County’s Transfer Tax: A Quick Guide
- Published on
- 4 min read
-
Joseph Gordon EditorClose
Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
If you’re preparing to sell a home in Cook County, you’ll likely encounter a line item at closing called the transfer tax. This is a type of real estate transfer tax — essentially a government fee for transferring property from one party to another.
Transfer taxes are commonly charged at the state, county, and local levels, and the total owed can vary depending on where your property is located.
In this guide, we’ll walk through how transfer taxes work in Cook County and what you can expect to pay. We’ll also explain the different types of transfer taxes, who is responsible for them, and whether you qualify for any exemptions that could reduce your costs.
Connect with a Top Agent to Help Maximize Value
Even rockstar agents can’t make your tax liability disappear, but HomeLight data shows that the top 5% of agents across the U.S. help clients sell their home for as much as 10% more than the average real estate agent, helping offset the tax bill.
What are transfer taxes?
Real estate transfer taxes are government-imposed fees that apply when property ownership changes hands. According to the Federal Trade Commission, this tax is assessed when the title — the legal documentation of property ownership — is officially transferred from the seller to the buyer.
These taxes are determined based on the property’s location and may be charged by the state, county, or city. The amount owed can vary widely depending on local laws. Like other real estate-related taxes, transfer taxes help generate revenue for public services such as schools, infrastructure, and municipal operations.
Who pays for transfer taxes?
The responsibility of transfer taxes varies depending on the municipality. In Illinois, it usually falls to the seller, but not always. In Cook County, sellers are responsible for any transfer taxes.
What are the types of transfer taxes?
Transfer taxes will typically vary based on local guidelines but can generally be broken down into three categories — state, city, and county, depending on the state. Here’s a quick look at how it works in Cook County.
State transfer taxes
The state of Illinois levies a transfer tax at a rate of $0.50 cents per $1,000 of the property’s sale price.
County transfer taxes
All counties in Illinois, including Cook County, charge a transfer tax of $0.50 per $1,000.00.
Other transfer fees
In addition to transfer taxes, there are possible fees to consider, such as from a homeowner’s association or another local neighborhood organization. Again, as these can vary heavily based on location, it’s important to consult a professional.
If you’re selling your home for sale by owner, consulting a professional might help with some of the finer points of the process and give you a better idea of what you can expect.
Are transfer taxes deductible?
You can’t deduct transfer taxes on your income tax return. But there is a silver lining when it comes to capital gains.
If you made a profit on the sale of your home, that profit — known as capital gains — may be taxable at the federal level. The IRS does, however, allow sellers to treat certain expenses, including transfer taxes as selling costs. That means you may be able to subtract them from your home’s final sale price when calculating your gain, which can help reduce the amount of taxes owed on your profit.
Transfer tax exemptions
Depending on where you live, you might qualify for a transfer tax exemption. Some states and local governments waive the tax in specific situations, often tied to the nature of the transfer or the parties involved. For example, in Cook County, exemptions might apply to:
- transfers made before 1968
- deeds involving property acquired by or transferred to a government entity
- deeds used to secure a debt or other obligation
- deeds that simply confirm, correct, or modify an earlier recorded deed
- transfers where the sale price is under $100
- deeds of partition between co-owners
- tax deeds issued through a government sale
Estimating transfer taxes for your home sale
If you’re wondering how much transfer tax might impact your bottom line, HomeLight’s Net Proceeds Calculator is a helpful place to start. It factors in typical closing costs — including transfer taxes, agent commissions, and repair costs — to give you a quick estimate of what you might walk away with when selling your home.
For a more precise breakdown, especially when it comes to local tax rates and negotiable costs, it’s smart to talk with a top real estate agent. A seasoned agent can help you understand who typically pays transfer taxes in your market and whether there’s any room to shift or share those costs during negotiations.
Header Image Source: (Dan / Unsplash)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
