From inventor to overnight millionaire? Not exactly. Here's the long-term solution to developing a product effectively.
Real estate transfer taxes vary greatly in the Chicagoland area. Here is a list (in PDF form). Note, however, that this list doesn't include any changes since July of 2007. For instance, it's missing the recent change (effective 4/1/08) to Chicago's transfer taxes. Traditionally, Chicago's tax was unique in that it was assessed only against buyers -- most transfer taxes are paid by sellers. Chicago now has a transfer tax for buyers AND sellers, at the following rates:
For buyers: $7.50 per $1,000.00 of purchase price
For sellers: $3.00 per $1,000.00 of purchase price (this is in addition to the combined county and state transfer tax of $1.50 per $1,000.00 of purchase price)
According to this article, Chicago now has the highest transfer taxes in the nation!
I used to recommend (somewhat facetiously) moving from Chicago to Oak Park, as Chicago only taxed buyers and Oak Park only taxed sellers. The result would be a pretty huge savings on the opposite move (from Oak Park to Chicago -- Oak Park taxes sellers at a rate of $8 per $1,000.00):
Transfer Taxes (prior to 4/1/08)
assuming sale of $400,000 home and purchase of $500,000 home
Sale in Chicago, Purchase in Oak Park: $600.00 (just county and state transfer tax on sale)
Sale in Oak Park, Purchase in Chicago: $7,550.00 ($3,800 for sale plus $3,750 for purchase)
That's a difference of almost $7,000! Of course, the difference is now smaller -- the tax hit for a "sale in Chicago, purchase in Oak Park" scenario as of 4/1/08 is $1,800.00.
Note that you can still find "bargains" from a transfer tax perspective, as municipalities like La Grange and Hinsdale have no transfer taxes whatsoever. You can use the above list and a little research to check on the municipality to which you are planning a move.
