In our “you can’t make this s%#* up” category, at the urging of new mayor Brandon Johnson, the Chicago City Council put an increased real estate transfer tax on the March 2024 ballot.
The “mansion tax” would impact home sales of more than $1 million with a graduated rate between 2 and 3%. When he was running for mayor earlier this year Johnson had pledged not to raise the high property taxes in the city. It took him all of six months to break that promise.
The tax will apply to commercial property owners, whose property values are already plummeting thanks to issues like skyrocketing crime and vandalism in the city.
This is supposed to pay for affordable housing, which raises the question of how raising taxes on housing lowers the price. Maybe the mayor thinks that millionaires will flee the city and these mansions can be converted into low-income housing. That will improve the neighborhoods.
Los Angeles voters imposed a similar tax on high-end real estate in 2022 and it’s been a disaster. LA officials forecast the new tax would raise $672 million for homeless services since it started in April, but it’s generated only $100 million during its first six months.