Joining other states considering similar moves across the country, the Illinois Department of Revenue plans to bring taxes on real estate transferred to and from mortgage giants Fannie Mae and Freddie Mac, including charges for foreclosed properties.
But the Federal Housing Finance Agency (FHFA) is trying to stop such taxes. It has filed a lawsuit against Illinois to prevent the state from charging real estate transfer taxes to Fannie Mae and Freddie Mac. FHFA argues in the lawsuit that the government-sponsored enterprises should be exempt because they are under conservatorship from the government.
Several other counties across the nation are considering a similar move to impose real estate transfer taxes on the GSEs.
"The Federal Housing Finance Agency recognizes the difficulties faced by local officials that are struggling with shrinking tax bases,” according to a recent statement released by FHFA. “However, FHFA must resist when local governments impose unlawful tax-raising programs on Fannie Mae and Freddie Mac that, in turn, create a cost for taxpayers across the country."
Source: “FHFA Sues Illinois to End Real Estate Transfer Taxes,” HousingWire (June 22, 2012)