Preparing questions about transfer taxes for a closing professional
Equip yourself with the right questions about Illinois property transfer taxes to ensure your closing costs are accurately calculated and understood.
The short answer
Transfer taxes are government fees triggered by property sales. In Illinois, these can be split between state, county, and local municipal authorities. Because these taxes vary significantly by location and specific municipal ordinances, you must ask your professional for a precise breakdown of what is being charged and who is responsible for paying it.
Defining the Scope of Transfer Taxes
Transfer taxes represent the revenue collected by governments during a real estate change of ownership. These are often based on a percentage of the sale price. Unlike loan fees, these are mandatory statutory requirements based on the location of the home.
Decision Worksheet: Identify your property's precise taxing jurisdiction. Ask the closing agent if a municipal transfer tax applies in addition to the state and county taxes.
Clarifying Seller Versus Buyer Responsibility
Responsibility for transfer taxes is often a matter of local custom or specific negotiation in your real estate contract. Some municipalities charge the tax to the buyer, while others require the seller to pay. It is essential to confirm what your contract stipulates.
Illustrative Example: If your contract says 'transfer taxes paid by the seller,' ensure your Closing Disclosure does not mistakenly list these as your responsibility.
Requesting Documentation for Taxes Paid
Once taxes are paid at closing, ask for evidence of payment for your records. This is important for tax purposes, as you may need to prove these costs in future filings. Always verify that the amount collected matches the statutory requirements of the local taxing authority.
Ask your professional: Can you provide a summary showing the state, county, and local transfer tax amounts, and confirm they were paid to the correct authorities?
Checklist
- Review the purchase contract to see who pays transfer taxes.
- Confirm the transfer tax rate for your specific municipality.
- Check if state and county transfer taxes are itemized on the Closing Disclosure.
- Verify if any exemptions apply to your transfer (e.g., transfers between family members).
- Request proof of payment for all transfer taxes after closing.
Common questions
Are transfer taxes the same as property taxes?
No. Transfer taxes are one-time fees paid when a property changes ownership. Property taxes are recurring, ongoing taxes paid annually to support local services like schools and infrastructure.
How do I find out the exact transfer tax for my town?
Contact your municipal clerk’s office or ask your real estate attorney or closing agent. They can provide the specific rate and explain how it applies to your purchase price.
Sources
- CFPB — Loan Estimate explainerChecked October 12, 2026
- CFPB — Closing Disclosure explainerChecked October 12, 2026
- Illinois Department of Revenue — Property tax overviewChecked October 12, 2026
- IRS Publication 523 — Selling Your HomeChecked October 12, 2026
This guide is general educational content from SQFT IO, prepared with AI assistance. It is not legal, tax or loan advice. Talk with a licensed attorney, tax professional or lender about your situation. SQFT IO Illinois license 478.027617.