I. What Are The Key Elements Of My Tax Bill?
Your real estate tax bill consists of three key elements: (1) the Assessed Valuation which is the “fair cash value” an assessing body places on a piece or property. The assessed valuation is used to determine each taxpayer’s share of the overall tax burden for a township or county in Illinois; (2) the Tax Rate which is the single composite rate derived from the individual tax rates levied each year by the various local taxing bodies–school districts, forest preserve districts, library districts etc. and (3) the State of Illinois Equalization Factor (“Multiplier” factor). This factor is set by the Illinois Department of Revenue on an annual basis. It is used to even out property assessed valuations from one area of a particular county to another area of that same county.
II. Can Reductions In Your Assessed Valuation Result In Tax Savings?
The answer to this question is an emphatic “Yes”. A reduction in a property’s assessed valuation automatically results in tax savings. This holds true whether the reduction resulted from an assessor’s office initially issuing a reduced assessed valuation or the assessed valuation as originally issued by an assessor is reduced via an appeal. The only question is the amount of tax savings obtained. Even if the township tax rate and Illinois Equalization Factor for a specific property increase in a specific tax year, a reduction in the assessed valuation assures tax savings for that specific tax year. For example, say that two separate property owners live right next store to each other and receive totally equal assessed valuations for a specific tax year. One taxpayer appeals his/her assessed valuation and obtains a reduction. The other taxpayer fails to appeal his/her assessed valuation and it remains as originally issued. The latter taxpayer then assumes a larger share of the overall tax revenue burden and pays more real estate taxes than his/her next door neighbor.
III. How Often Is Property Reassessed By Various Counties?
Different counties reassess properties–residential, commercial and industrial–at different time intervals. For example, Lake, DuPage and McHenry Counties reassess all county properties annually. However, Cook County reassesses properties in specific areas every three (3) years. This is known as the Triennial Reassessment process. In 2014 townships in the South and West suburban areas of Cook County are being reassessed. In 2015 the entire City of Chicago will be reassessed and in 2016 the North and Northwest suburban areas of Cook County will be reassessed.
IV. Are Real Property Assessments Uniform From One Illinois County To The Next?
In 100 of the 101 counties in Illinois all properties–residential, commercial, industrial and multi-family (i.e. condos or apartment buildings)–are assessed at 33.33% of fair cash value. However, Cook County assesses property based on a classification system. Residential, multi-family and vacant land property is assessed at 10% of fair cash (market) value while commercial, industrial and not-for-profit properties are assessed at 25% of fair cash value. By way of example, in Cook County a single family home with a market value of $500,000 has an assessed value of $50,000. Simultaneously, a commercial office building with a market value of $500,000 has an assessed value of $125,000.
V. As An Illinois Taxpayer Am I Entitled To Certain Tax Exemptions?
Taxpayers in every county of Illinois are entitled to various real property tax exemptions and incentives. For instance, both Lake and Cook Counties offer: (1) a Homestead Exemption for taxpayers who actually reside in their residential property; (2) a Senior Homestead Exemption for individuals 65 years and older who actually live in their home, while making it their principal residence; (3) a Disabled Persons Exemption for homeowners with a disability; and (4) a Returning Veterans Exemption for veterans returning from military service.
With regard to property tax incentives for businesses, Cook County just recently implemented a countywide program known as the Sustainable Emergency Relief (SER) Program. This program is intended to help companies that have been located in the same facility for 10 or more years. Those companies that are eligible for and obtain approval under program guidelines can realize very extensive tax savings.
Taxpayers should contact my office and/or their local tax assessor office(s) to find out: (1) what exemptions are available to them; and (2) what criteria must be satisfied to qualify for a specific tax exemption or incentive.