Brandon Johnson suggests increasing taxes on luxury homes in Chicago as a means to combat homelessness.

Chicago Mayor Brandon ⁣Johnson Makes Changes to Tax Proposal to Address Homelessness

Chicago Mayor ‌Brandon Johnson is taking steps to fulfill his campaign promise of combating homelessness, but not without facing concerns from property owners about potential tax burdens. In response to these concerns, Johnson has revised his proposed tax system, shifting away from the city’s flat tax⁤ rate on all property sales.

The original proposal, which Johnson presented during his campaign, included two tiers: a 0.75% tax on ⁤home sales below $1 million and a 2.65% tax on properties above $1 million. However, the revised proposal,⁤ known as the ⁤”Bring ​Chicago Home” initiative, introduces a three-tier system for home sales.

Under the new plan, properties will be categorized based ‌on‌ their value: those under $1 million, those between $1 million and $1.5 million, and those above $1.5 million. While owners ⁣of properties below $1 ‌million will benefit ⁣from lower tax rates, with the‌ rate dropping from 0.75% to 0.6%, owners in the second and third tiers will experience increased ⁢tax rates of 2% and 3% respectively, the latter being four times the current rate.

City‍ officials have clarified that the tax increases for the second and third tiers will only apply to buyers, while the first​ tier will affect both buyers and sellers. The tax rates will be calculated⁣ using a marginal rate, ensuring fairness in the system.

Johnson’s team estimates that the ⁢lower tax rate on sales below $1 million will impact nearly 96% of property sales in Chicago, providing relief to property owners ​and smaller multifamily buildings. However, large ⁣commercial property owners downtown have expressed concerns about higher taxes, especially during a​ period of slow sales and high ⁤interest rates. This has led to increased property taxes and weakened demand for Chicago real estate.

The proposed three-tier plan has faced⁢ criticism from industry leaders. Farzin Parang, executive director ⁣of the Building Owners ⁢and Managers Association, believes that burdening one industry sector, particularly during a vulnerable time, is not sound public policy. Michael Jacobson, CEO ⁣and president⁢ of the Illinois Hotel & Lodging Association, sees the proposal as a reason for businesses to ​consider relocating.

The revised tax proposal, expected to be introduced before the Chicago City Council on Sept. 13, will undergo further scrutiny. If approved, it‍ could appear on the ⁤primary ballot in March 2024, allowing voters to decide whether to accept the modifications to the ⁢city’s tax system. The revenue generated from the tax changes ‍would be dedicated to addressing homelessness in Chicago.

Chicago ⁤is taking a proactive approach to tackle homelessness, but the proposed tax modifications have sparked a lively debate ⁢among property owners⁢ and industry leaders. The outcome ‌of this proposal will have significant implications for the city’s tax system and its efforts to combat homelessness.

Read More:

To learn more about this topic, click here.

*As an Amazon Associate I earn from qualifying purchases