Update 10-20-08 at 11:30 AM: The Special Rules Meeting scheduled for Monday, October 20th has been rescheduled for Wednesday, October 22nd at 7:00 pm in the Board Room of Village Hall, 350 Victory Drive. Any questions prior to Wednesday’s meeting should be directed to the Economic Development and Planning Department at 708-283-5617.
Park Forest, IL–(ENEWSPF)– In ongoing efforts to level the playing field for all forms of housing within the Village, a draft ordinance has been developed that would amend the Village’s Real Estate Transfer Tax Ordinance to include the transfer of shares in the local Cooperative Housing Community.
According to a memo prepared for the Village Board for Monday’s meeting by Village Manager Tom Mick and Director of Community Development Larrie Kerestes, the Village code has long required that a transfer tax be paid whenever an interest in real estate has been transferred with a sales transaction of more than $500.00. The State of Illinois, Cities of Chicago & New York, and other entities have enacted administrative regulations interpreting their transfer tax laws or ordinances. These administrative regulations make it clear that the tax is imposed on all transfers of real estate regardless of what form they take, including “transfers of title to real estate” or “transfer on an interest in real estate” or “transfer of shares in real estate.”
"In other words, all that matters is that a transaction has taken place that changes which individuals have the right to occupy and possess a particular parcel of real estate. If such a transaction has taken place, it is a taxable event," the memo says.
According to the memo, the administrative regulations issued by the State and the Cities of Chicago & New York specifically mention, among other things, that transfers in stock in cooperative housing corporations are subject to the transfer tax. The State’s transfer tax law and the Chicago’s transfer tax ordinance are written in a similar style to Park Forest’s, so they are all subject to the same interpretations.
"This common sense interpretation has the beneficial effect of treating all real estate transactions equally," the memo continues.
The Village attorney has advised staff that the Village’s current ordinance allows the Village to capture taxes on cooperative transfers. However, without a mechanism requiring that stock transfers be reported to the Village, the Village has no way of knowing when a Cooperative unit is sold.
Staff therefore has prepared an ordinance that imposes a requirement that the corporation itself not accept the stock transfer unless the corporation receives proof of the tax payment. This ordinance mirrors the state law imposes a similar duty on banks which hold land trusts, according to the memo.
In August of this year, Village Officials met collectively with the Board Presidents and Property Managers for all five Park Forest Cooperatives. The ordinance, drafted by Village Attorney Paul Stephanides, was done so as a result of this meeting and with guidance offered by the Cooperative representatives. Additionally, the draft ordinance was shared with each of the five Housing Cooperatives in mid-September so as to solicit additional feedback. Finally, each of the
impacted entities has been made aware of the Village’s time line for review as follows:
- October 20, 2008 – First Reading
- November 3, 2008 – Rules Discussion
- November 10, 2008 – Final Reading & Adoption
- January 1, 2009 – Implementation