Joliet will close loophole on transfer tax

The city plans to close a loophole that officials say has allowed property sellers to skip unpaid utility bills.

Joliet Deputy City Attorney Chris Regis told a City Council committee this month that rental property owners in particular “have got a good scheme going” in which they can falsely claim a property is exempt from the city’s real estate transfer tax when filing a deed with the county.

“I can tell you on Tuesday we lost $9,000,” Regis told the Land Use and Legislative Committee when it met Aug. 11.

The amendment would require that Joliet certify that no taxes or utility bills are owed to the city before a deed could be submitted to the county clerk for transfer of ownership.

Regis said the city’s ordinance now is so loose that a property owner can simply write the word “exempt” on forms submitted to the county and escape any claim on unpaid city bills and taxes before ownership is transferred.

“They want to keep that scheme going by keeping that loophole open,” Regis said.

The committee had previously tabled the matter out of concerns raised by representatives from the real estate industry.

This time, the committee voted 3-0 to amend the city’s ordinance, which will go to the full council for approval in September.

The amendment was recommended after a controversial tabling of a proposal to add single-family rental residences to the city’s rental inspection program at the request of landlords and Realtors.

The local real estate industry did not put up a fight against the amendment to the real estate transfer tax rules, although they had opposed it previously.

Regis said cities of the size of Joliet typically have in place the rules that would be put into effect by the amendment to the city’s real estate transfer ordinance.