Real Estate Transfer Tax Changes

              Public Act 93-657 amends the Illinois
Real Estate Transfer Tax Law.
Effective June 1, 2004, the tax is
imposed on the privilege of transfer-ring
the following additional types of
beneficial interests in real property:
the lessee interest in a ground
lease for a term of 30 or more
years; and
the indirect interest in real prop-erty
as reflected by a controlling
interest in a real estate entity.
Before June 1, 2004, these transac-tions
were not taxed by the State of
Illinois.
This informational bulletin explains
the additional types of beneficial
interests now subject to the tax;
what forms must be completed;
and
how much tax is owed.
When is a ground lease
subject to the tax?
A ground lease with at least a
30-year term is subject to tax. Be
sure to include any expired portion
and all options to renew or extend
the lease when you calculate this
30-year requirement.
Note: Any interest of the lessee in
improvements on the parcel is also
subject to tax.
Real Estate Transfer Tax Changes
FY 2004-15
May, 2004
Illinois Department of Revenue
Informational Bulletin
For paper versions of
Form PTAX-203 and
Form PTAX-203-B,
visit the county
recorder’s office.
For electronic
versions of Form
PTAX-203 and Form
PTAX-203-B,
visit our web site at
www.revenue.state.il.us/
retd.
To:
All persons or entities transferring a beneficial interest in
Brian A. Hamer real property located in Illinois
Director of Revenue
Printed by authority of the State of Illinois
310 copies - 5/04 - P.O. Number 2041334
What is a real estate entity?
A “real estate entity” is any person
including, but not limited to, any
partnership, corporation, limited
liability company, trust, other entity,
or multi-tiered entity that exists or
acts substantially to hold direct or
indirect title to or beneficial interest
in real property.
Generally, an entity meets this
definition if it owns, directly or indi-rectly,
real property with a fair
market value greater than 75 per-cent
of the total fair market value of
all its assets. Do not deduct any
mortgage, lien, or encumbrance,
when you make this determination.
When is a controlling
interest transfer subject to
the tax?
A controlling interest transfer that
includes more than 50 percent of
the fair market value of all owner-ship
interests or beneficial interests
in a real estate entity is subject to
tax.
Note: Interests will be aggregated if
there is a series of related transfers
within a rolling 24-month period. For
more information, see Form
PTAX-203-B instructions.