By Lauren Elliott, Attorney with Elliott & Associates Attorneys, P.C., and Angela Duea, LMS Communications Manager
Residents in Cook County found a gift from their Treasurer in their mailboxes in early February: a bill for the first installment of their 2017 property taxes. We say ‘gift’ for humor, but in reality, the tax bill is a receipt for services rendered by the state and local government. This event happens twice a year, but the process to determine the amount of tax you owe and the value of your property appears to be a bit of a mystery to some.
In this post of our series on Illinois Property Taxes, we will demystify the tax calculation procedure so that you understand why your bill says what it does. Stay tuned for updates throughout this year.
Illinois residents pay real estate taxes one year in arrears, which means that owners are paying taxes this year for property they owned in 2017. Tax bills are issued twice a year, around January (payable March) and typically around July (payable August). The first bill is an estimate containing 55% of the previous year’s total bill. The second bill contains any adjustments from reassessment or appeal, along with any changes in the tax rate or State equalizer and deductions for exemptions.
How is your real estate tax bill calculated?
Several numbers go into your property tax calculation. Your County Assessor determines the share of property taxes you pay, while your local taxing bodies determine the overall amount of your taxes by their spending. The tax formula is as follows:
Assessed Value x State Equalizer – Any Exemptions x Local Tax Rate
= Tax Bill
For the most part, the assessed value is the number in the formula commonly appealed. If you believe your property is inaccurately assessed, you can hire an attorney, or your Association may hire one on behalf of the entire community. In Cook County, the assessed value of residential property should represent 10% of its fair market value.
Simply put, the State equalizer is applied to Cook County assessments to balance them with the rest of the state, which assesses at 33% of market value.
The County Clerk determines the local tax rates based on annual spending budgets approved earlier in the year for the various applicable governmental bodies (taxing districts). This number varies by year.
How is your property assessed?
The Assessor is responsible for setting fair and accurate values for 1.8 million parcels of Cook County property. The Cook County Assessor reports to use mass appraisal techniques to assess the fair market value of these parcels. The Assessor is charged with reassessing the fair market value every three years; 2018 is the year for reassessment in the city of Chicago.
For the most part, we expect to see single family homes of similar size, location, age and construction similarly assessed in terms of value per square foot.
How does the Assessor determine the fair market value of a condominium unit?
Determining the fair market value of a condominium is different from determining the value of a single family home. Generally, assessing officials in Cook County will determine the full value of the entire condominium development, and then allocate an assessed value to each unit by multiplying the percentage of ownership by the full value of the entire development. An owner’s percentage of ownership is set forth in the Association’s declaration.
For the most part, assessing officials determine the full value of the entire development based upon recently recorded sales in the development.
(Purchase price of unit sold-personal property included in sale) / Percentage of ownership attributed to the unit sold
= market value of the development (MVD)
When there are multiple recent sales within the development, assessing officials generally determine the full value of the entire development by taking the average MVD of recent sales considered.
Further information can be found in this helpful video by Elliott & Associates: Tax Assessments
If you have questions about your property taxes, or the tax process, remember that your Lieberman property manager is well versed in these topics. Give us a call, or send an email to firstname.lastname@example.org.