A Cook County judge has ruled that the controversial Chicago real estate transfer tax referendum be removed from the March 19 ballot. 

If approved by voters, the measure would have increased the transfer tax on properties sold for more than $1 million. Under the proposal, the tax would have increased from 0.75% to 2% on Chicago properties sold for between $1 million and $1.5 million. The tax would have increased to 3% on properties sold for more than $1.5 million. For properties that sell for less than $1 million, the tax would have dropped to 0.6%. 

The proposal was a centerpiece of Mayor Brandon Johnson’s plan to generate money to combat homelessness, although there were few specifics on how the projected additional $100 million in annual revenue would be spent.

Critics, which included the Chicago Association of REALTORS® and several other local real estate organizations, said the plan would lead to higher rents and curb development efforts while hurting the city’s overall real estate industry.

In January, the Building Owners and Managers Association of Chicago (BOMA/Chicago) and other local business groups filed a lawsuit alleging the referendum proposal was illegal as initially proposed. 

The referendum language was going to list all three potential tax adjustments under the umbrella of a single question, on which voters could simply vote yes or no, according to a BOMA/Chicago news release. And the co-plaintiffs alleged that presentation was “unconstitutional.”

“The binding referendum would force voters to approve or reject three separate policies in one question, including a tax decrease, to manipulate voters into approving two separate tax increases,” BOMA/Chicago said.

On Friday, Judge Kathleen Burke agreed, striking down the referendum proposal.