Illinois Department of Revenue FY 2004-15 Real Estate Transfer Tax Changes May, 2004 Informational Bulletin To: All persons or entities transferring a beneficial interest in Brian A. Hamer real property located in Illinois Director of Revenue For paper versions of Public Act 93-657 amends the Illinois What is a real estate entity? Form PTAX-203 and Real Estate Transfer Tax Law. A “real estate entity” is any person Form PTAX-203-B, Effective June 1, 2004, the tax is including, but not limited to, any visit the county imposed on the privilege of transfer- partnership, corporation, limited recorder’s office. ring the following additional types of liability company, trust, other entity, beneficial interests in real property: or multi-tiered entity that exists or For electronic the lessee interest in a ground acts substantially to hold direct or lease for a term of 30 or more indirect title to or beneficial interest versions of Form years; and in real property. PTAX-203 and Form PTAX-203-B, the indirect interest in real prop- Generally, an entity meets this erty as reflected by a controlling definition if it owns, directly or indi- visit our web site at interest in a real estate entity. rectly, real property with a fair www.revenue.state.il.us/ retd. Before June 1, 2004, these transac- market value greater than 75 per- tions were not taxed by the State of cent of the total fair market value of Illinois. all its assets. Do not deduct any mortgage, lien, or encumbrance, This informational bulletin explains when you make this determination. the additional types of beneficial interests now subject to the tax; When is a controlling what forms must be completed; interest transfer subject to and the tax? how much tax is owed. A controlling interest transfer that When is a ground lease includes more than 50 percent of the fair market value of all owner- subject to the tax? ship interests or beneficial interests A ground lease with at least a in a real estate entity is subject to 30-year term is subject to tax. Be tax. sure to include any expired portion and all options to renew or extend Note: Interests will be aggregated if the lease when you calculate this there is a series of related transfers 30-year requirement. within a rolling 24-month period. For more information, see Form Note: Any interest of the lessee in PTAX-203-B instructions. improvements on the parcel is also subject to tax. Printed by authority of the State of Illinois 310 copies - 5/04 - P.O. Number 2041334 Real Estate Transfer Tax Changes FY 2004-15 Page Informational Bulletin 2 What forms must be filed? Interim Instructions for Form PTAX-203 Both Form PTAX-203, Illinois Real Estate Transfer Declara- (ground leases or controlling interest tion, and Form PTAX-203-B, transfers) Illinois Real Estate Transfer Declaration Supplemental Form B, must be filed for ground On the line provided in Step 1, Line 5 leases and controlling interest (Other), write “ground lease” or “control- transfers. These forms must be filed in the county where the ling interest in a real estate entity”. property is located within three business days after the transfer Do not complete Step 2 of Form PTAX-203. or when a document is recorded, (You will calculate the amount of tax due whichever is earlier. in Step 4 of Form PTAX-203-B.) Paper versions of both forms are available in the county recorder’s office. Substitute the appropriate terms for “seller” and “buyer” in Step 4 of Form PTAX-203. We are in the process of revising Form PTAX-203. Until both the paper and electronic versions of Write “Form PTAX-203-B” in the blank area this form are available, please to the right of the preparer’s email address use the instructions in the gray in Step 4 of Form PTAX-203. box to the right. How much tax is owed? The state tax is based on the net consideration for the transfer after allowed deductions. The rate is 50 cents per each $500 of value or fraction thereof. There is currently no county tax on ground leases or controlling interest transfers, except in Cook County.