Illinois Transfer Taxes For Sellers: Basics To Know

Selling a home in South Barrington comes with many moving parts, and transfer taxes are one of the most overlooked line items. You want a clear picture of what you’ll owe at closing so there are no surprises. In this guide, you’ll learn what transfer taxes are, who typically pays them in Illinois, what applies in South Barrington, how they are calculated, and where exemptions might help. Let’s dive in.

Transfer tax basics

A real estate transfer tax is a government tax charged when the deed to a property changes hands. It exists to raise revenue and to document the transfer when the deed is recorded.

In Illinois, transfer taxes can be levied by more than one level of government. You may see charges from the state, and potentially from a county or municipality. What you pay depends on where the property is located and the rules in that locality.

Customarily in Illinois, the seller pays most transfer taxes. That said, it is negotiable. Your purchase contract should clearly state who pays which taxes. If the contract is silent, local practice may control.

Transfer taxes are typically paid at closing and remitted when the deed is recorded. If transfer tax is not paid, the deed may not be recorded, which can cause legal and marketability problems. Nonpayment can also lead to penalties and interest.

What applies in South Barrington

For a home in South Barrington, you should expect the Illinois state transfer tax to apply. Because South Barrington is a village in Cook County that sits outside the City of Chicago, Chicago’s municipal transfer tax does not apply to your sale.

Counties and municipalities in Illinois can impose additional transfer taxes or fees. Rules and rates vary by locality. For South Barrington, the prudent approach is to confirm with your title company or closing attorney whether Cook County or the Village of South Barrington has any local taxes, transfer stamps, or administrative fees tied to recording.

The practical takeaway is simple. Budget for the state transfer tax, then verify any county or village-level items with your closing team before you sign a contract.

How the tax is calculated

Transfer taxes are usually based on the sale price, sometimes called the consideration. The tax is calculated using a formula set by the taxing authority, often as a rate per $500 or per $1,000 of value. Your Closing Disclosure and the deed paperwork will show the calculation and the amount due.

Here is a simple state-level example for illustration only. If the rate were $0.50 per $500 of value, a $400,000 sale would be calculated like this: 400,000 divided by 500 equals 800 units, multiplied by $0.50 equals $400. This is an example to show how the math works. Always confirm the current Illinois rate and any local add-ons with your title company or the Illinois Department of Revenue before you finalize your budget.

On higher-priced homes, the dollar amount of transfer taxes scales with the sale price. Your title company can provide a precise estimate based on your contract price and your property’s location.

Budgeting for closing

For many suburban Cook County single-family sales, transfer taxes and typical local fees often total a few hundred dollars for modest prices and can reach into the low thousands as prices increase. The exact amount depends on your sale price and any local surtaxes or fees.

Keep in mind, transfer tax is just one part of your overall closing costs. You may also have:

• Real estate commissions
• Mortgage payoffs and related payoff fees
• Prorated property taxes
• Title insurance and closing or attorney fees
• Recording fees
• HOA or management company transfer fees, if applicable
• Potential capital gains taxes, depending on your situation

Transfer tax is usually a smaller fraction of the total, but it should be budgeted explicitly so your net proceeds are accurate.

Exemptions and special cases

Some transfers qualify for exemptions or reduced obligations under Illinois law. Common examples include certain transfers between spouses, divorce-related conveyances, transfers into or out of a revocable trust, transfers to governmental entities, or corrective deeds that involve nominal consideration. Inherited transfers, parent-child transfers, or sales to certain affiliated entities can have special rules as well.

If you believe an exemption applies, documentation is key. Recorders and title companies often require an exemption affidavit or sworn statement at closing. Without the right paperwork, your deed can be delayed or taxed incorrectly. Work with your closing attorney or title company early so you have the correct forms in hand.

For income tax purposes, transfer taxes are a closing cost that reduce your net proceeds. The treatment on your federal or state returns can vary. Do not assume transfer taxes are deductible. Consult a qualified tax professional for guidance on your specific situation.

Steps to confirm your numbers

Use this checklist as you plan your sale in South Barrington:

1. Ask your listing agent or attorney for a seller net sheet or preliminary closing statement that includes transfer tax line items.
2. Confirm with your title company or closing attorney which taxes and recording fees apply to your address, and who customarily pays them.
3. Verify whether Cook County or the Village of South Barrington requires any local transfer tax, stamp, or special recording fee for your transaction.
4. If you may qualify for an exemption, request the exact affidavit form and supporting documents required to apply it.
5. Review your final Closing Disclosure to confirm the transfer tax entries before signing.
6. Talk with a CPA about how transfer taxes and other costs could affect your tax reporting or basis.

Avoid common pitfalls

A few preventable mistakes tend to cause stress at the finish line:

• Assuming Chicago’s city transfer tax applies. It does not apply to South Barrington sales.
• Failing to specify in the purchase contract who pays transfer taxes. Clarify this early to avoid last-minute disputes.
• Overlooking a needed exemption affidavit. Missing documents can delay recording and trigger the wrong charges.
• Forgetting that nonpayment can hold up recording. If the deed does not record, you have a legal and marketability problem.

When in doubt, ask your title company or closing attorney to double-check your file. A five-minute call can save days of delay.

Local help when you sell

You do not have to map this out alone. As a locally rooted team, we help South Barrington sellers estimate transfer taxes upfront, confirm local requirements with the title company, and make sure the purchase contract clearly states who pays what. We coordinate the right affidavits, track your Closing Disclosure, and aim to deliver a smooth, on-time recording.

If you are thinking about selling, we would love to help you plan a clean, confident closing. Connect with Kate Fanselow for a personalized net sheet and next steps.

FAQs

Do South Barrington sellers pay Chicago’s transfer tax?

• No. Chicago’s city tax applies only inside Chicago city limits. In South Barrington, expect the state transfer tax plus any county or village-level fees that may apply.

How much should I budget for transfer taxes in South Barrington?

• Plan for at least the Illinois state transfer tax, which scales with sale price, plus any local fees. For many suburban sales, the total is often a few hundred dollars and increases on higher prices. Ask your title company for a precise quote.

Can the buyer pay Illinois transfer taxes instead of the seller?

• Yes. Who pays is negotiable and should be spelled out in the purchase contract. Local custom often has sellers paying most transfer taxes, but parties can agree otherwise.

When are transfer taxes paid during an Illinois closing?

• At closing. The taxes are collected on your settlement statement and remitted when the deed is recorded with the county.

What documents do I need if I qualify for an exemption?

• Most exemptions require an exemption affidavit or sworn statement, and sometimes supporting documents. Ask your title company or recorder’s office what is required for your situation.

Where will transfer taxes appear on my Closing Disclosure?

• Look under government fees and transfer taxes or recording sections. Your title company can point to the exact line items before you sign.

Are transfer taxes deductible on my federal tax return?

• It depends. Transfer taxes are a closing cost that reduce net proceeds. Deductibility can vary, so consult a CPA before filing.