Understanding Will County’s Transfer Tax: A Quick Guide
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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 selling your Will County home, you probably have questions about transfer taxes. How do they work? How much are they? Who pays for them? While transfer taxes aren’t complicated, they work differently across city, state, and county lines, so knowing how they work for where you live is important.
Transfer taxes are fees levied by local or state authorities when real property (like a home) changes ownership. Transfer tax rates can have a big impact on your bottom line.
This guide will explain how transfer taxes work in Will County, including their cost, who is liable for them, and any possible exemptions. Additionally, we will explain how transfer taxes can affect your capital gains burden and why working with a real estate agent is a great idea.
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 fees imposed by state or local governments when property ownership is transferred from one individual to another. According to the Federal Trade Commission, these taxes are due when the title to a property, essentially the document that confirms your legal ownership, is officially passed to a new owner.
The amount owed in transfer taxes can vary significantly based on the property’s location, as different states, counties, and cities usually have unique rates and regulations. Transfer taxes primarily serve as a means for local and state governments to generate revenue, funding various public services and infrastructure projects.
Who pays for transfer taxes?
Sellers are usually responsible for transfer taxes in Will County, but this can vary depending on the terms of the sales agreement.
What are the types of transfer taxes?
Transfer taxes typically vary according to local regulations but can generally be categorized into three types: state, city, and county, depending on the state. Here’s a brief look at how it works in Will County.
State transfer taxes
In Illinois, a documentary transfer tax of $0.50 per $500.00 of the home’s sales price is applied to non-exempt real estate transactions.
County transfer taxes
The Will County transfer tax rate is $0.25 per $500.00 of the property’s sales price.
Other transfer fees
Besides transfer taxes, there may be additional fees to consider, such as those from a homeowner’s association or local neighborhood organization. Since these can vary widely based on location, consulting a professional is advisable.
If you’re selling your home without a realtor, seeking professional advice can help clarify some of the nuances of the process and provide a clearer picture of what to expect regarding the pros and cons of selling a house without a realtor.
Are transfer taxes deductible?
Transfer taxes are, unfortunately, not eligible for tax deduction.
However, you can lower the amount you pay in capital gains taxes.
Capital gains, defined as the profit obtained from the sale of your home or the financial gain from selling your property, are subject to federal taxation just like profits from the sale of other assets.
According to the IRS, sellers can treat paid transfer taxes as selling costs, subtracting them from their home’s closing sale price. This allows them to lessen the capital gains taxes owed on any profit earned.
Transfer tax exemptions for Will County
Not all real estate transactions in Will County are subject to transfer taxes. Depending on the situation, the property in question might be exempt. Here are a few examples of exemptions in Will County. For a complete list, consult the Will County FAQ on real estate transfer taxes.
- Transactions under $100
- Tax deeds
- Deeds changing hands between corporations as part of a merger or acquisition
- Deeds used to secure debt or some other financial obligation
Estimating transfer taxes for your home sale
To better understand what you can earn from selling your Will County home, consider using HomeLight’s Net Proceeds Calculator. This tool accounts for essential costs such as closing expenses, transfer taxes, agent fees, and any improvements made to the property, providing a clear estimate of your potential earnings from the sale.
Collaborating with a top real estate agent can also offer valuable insights tailored to your needs. HomeLight can connect you with a top Will County real estate agent today who can give you the peace of mind needed to sell your home quickly and confidently.
Editor’s note: This post is for educational purposes only and does not constitute legal or financial advice. Links and mentions of Will County area tax services or attorneys should not be considered endorsements.
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