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Referendum Real Estate Transfer Tax – Village of Oswego, IL

What:
Referendum question to ask voters for approval of a new real estate transfer tax on FUTURE buyers of Oswego property.

Why:
To find help fund the Village’s connection to a new water source by shifting the burden to FUTURE residents and businesses who purchase property in our community

When:
Vote on June 28 primary election or through early voting. 

History:

After years of study, it has been determined that the Village of Oswego’s aquifer will no longer be able to provide a sustainable water source for the community. In the past year, Village President Toy Parlier has asked staff to identify alternative revenue sources for the Village to connect to Lake Michigan drinking water through the DuPage Water Commission. Staff was tasked with finding new revenue sources that could be borne primarily from non-residents. Total costs are still being determined, but are estimated to be in the upwards of $75 million.

The real estate transfer tax is imposed by many Illinois municipalities to help offset the costs of infrastructure improvements such as roads, bridges, and sewers.

Frequently Asked Questions

What is a real estate transfer tax? 
A real estate transfer tax is levied on the transfer of ownership or title of property from one individual or entity to another. The amount of the tax is based on the property’s purchase price.

How is it different than property taxes?
A real estate transfer tax is a one-time fee that is collected as part of the closing costs on the sale of a property. A revenue stamp is required to be attached to the deed filed with the county.  

Would current Oswego homeowners have to pay the real estate transfer tax?
No. Only new buyers would pay. Plus, current Oswego property owners who purchase a new home in Oswego would be exempt if they have lived in their home for a year or more.

Who pays the real estate transfer tax?
New buyers of residential or commercial properties located within the village limits would be responsible for paying the tax On April 5, the Board passed an ordinance exempting the tax from applying to current residents who own residential property and then purchase and move to another residential property within the Village. Other exemptions may apply.

What are some other Illinois communities that have a real estate transfer tax?

Aurora Bolingbrook Bartlett Elmhurst
Naperville Sycamore Wheaton Carol Stream
Joliet Streamwood Glen Ellyn Addison
Romeoville Woodridge Downers Grove Elk Grove Village

Why don’t all Illinois municipalities impose a real estate transfer tax?

Only municipalities with home rule status may impose a real estate transfer tax. Because the Village of Oswego enjoys home rule status as a municipality of more than 25,000 residents, it can place a referendum on the ballot to ask voters for approval to allow the real estate transfer tax on new buyers.

What is the proposed real estate transfer tax rate?
The proposed rate is $3.00 per $1,000 of the purchase price, or 0.3%. For example, the transfer tax on a property with a purchase price of $300,000 would be $900.

How much money will be generated?  
The proposed tax provides a way for future residents to offset the impact of water rate increases when the Village connects to Lake Michigan water. We estimate that it will generate more than $500,000 per year. Without the tax, that amount would likely have to be generated through increased water rates.

What will the money be used for?
The language of the referendum question limits the use of the tax revenues to construction and maintenance of the Village of Oswego water system, including connection to Lake Michigan water.

When will it appear on the ballot?
Tuesday, June 28, 2022

What is the question on the June 28 ballot?
“Shall the Village of Oswego impose a real estate transfer tax at a rate of $3.00 per $1,000 of value to be paid by the buyer of the real estate transferred, with the revenue of the proposed transfer tax to be used for construction and maintenance of the Village of Oswego water system, including connection to Lake Michigan water, and lessening the increase in future water rates?”

If the real estate transfer tax is passed, when will it take effect?
Once election results are certified and the referendum passes, the tax may take effect as soon as August 1, 2022.

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