Chicago voters will decide in March whether to adopt a tiered real estate transfer tax that would increase fees on transactions worth $1 million or more.

On Tuesday, The City Council voted 32-17 to put a binding referendum on the ballot about the transfer tax, placing the measure in the hands of Chicago voters. 

If approved, the transfer tax would increase from 0.75% to 2% on Chicago properties sold for $1 million to $1.5 million. The tax would increase to 3% on properties sold for more than $1.5 million. For properties that sell for less than $1 million, the tax would drop to 0.6%. 

Mayor Brandon Johnson has made the transfer tax a priority and said it would generate about $100 million each year to combat homelessness. If the measure gets voter approval, the City Council would then need to specify how it would allocate the money to address homelessness. The lack of specifics on that front has drawn some political opposition. 

In addition, critics say the proposal could lead to increased rents, limit development and add one more hurdle to an already sluggish Chicago housing market. 

The Chicago Association of REALTORS posted a message on its website Tuesday. It said, in part: “Despite our advocacy efforts and significant outreach, this measure was approved and will be considered by voters on March 19, 2024. While we did not get the outcome intended, passage of this resolution was anticipated. Our strategy includes continued education and outreach over the coming months leading up to the March primary.”