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In a major victory for the real estate industry, a Chicago judge has blocked a referendum that would have quadrupled the taxes buyers pay on the city’s most expensive properties.
Residents were scheduled to vote in less than four weeks when Judge Catherine Burke ruled Friday that the measure was invalid. The question will remain on the ballot, but the vote will not be counted, Klein’s Chicago Business the report said.
“We are pleased with the judge’s ruling, which underscores the need for policy issues to be presented to the public in a fair, detailed and transparent manner,” said Farzin Parang, executive director of the Chicago Building Owners and Managers Association. “This referendum will be a backdoor property tax for all Chicagoans, and it’s important that our elected officials don’t mislead voters.”
BOMA and other commercial real estate groups filed a lawsuit in January to block the measure, saying it illegally consolidated multiple issues into one.
Illinois Realtors pledged to spend $1 million on the measure, sending out mailers and running digital ads, framing the tax increase as a hidden property tax and rent increase for all Chicagoans.
The measure would implement graded tax increases. The lowest tax rate applies to properties worth less than $1 million. The intermediate tax rate applies to sales between $1 million and $1.5 million. The highest tax rate applies to properties worth more than $1.5 million.
Under the proposal, homes priced under $1 million would receive a small tax break.
The measure was a key political goal early in Mayor Brandon Johnson’s first term. Johnson and the measure’s backers had hoped to use money raised from the tax increase to pay for unspecified homeless services.
Critics say the city has no plan for the money, saying the tax increase won’t be as much as expected and accusing the city of not spending available federal funds on homeless services.
They also said the measure would further hamper the already struggling commercial real estate industry nationwide.
Realtors and other opponents said the tax increase would lead to further declines in commercial property values, which would force the city to raise property taxes in the residential market. Chicago’s property taxes are already among the highest in the nation.
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