Taking the Sting Out of Your Property Tax Bill

For many of us in Cook County, last Wednesday was the deadline for on-time payment of our 2011 Second Installment Property Tax bills. Understanding these bills can be challenging, to say the least – particularly in today’s real estate market.  If your taxes are paid by mortgage escrow, it can be even more important to understand your property tax obligation and how it changes from year to year, since shortfalls in your mortgage escrow account can have negative consequences that may drastically increase your monthly mortgage payment.  Above all, once you understand how your property tax bill is calculated, you may discover opportunities to reduce your tax liability with exemptions, or through the appeals process.

Cook County uses a two-step process to establish your final property tax liability.  First, the County determines your property's "Assessed Value."  Next, the County calculates the property's "Taxable Value" by applying the state equalization factor and any applicable exemptions.

The first step in understanding your tax bill is getting to know your Assessed Value. Under Illinois law, the assessment must be based on the "fair cash value" of the property.  This value is not necessarily the actual sales price of a given property, but rather an estimate of what the sale price of the property would likely be on a given date (January 1 in Cook County).  Once the County Assessor has estimated the full fair cash value of the property, it applies a percentage "level of assessment," based on the specific class of the property, to reach the Assessed Value.  For example, most single-family residential properties are subject to a 10% assessment level.  So, a single family home with an estimated fair cash value of $350,000 would have an Assessed Value of $35,000.

Once the Assessor determines your property's Assessed Value, the State Equalization Factor is applied.  Illinois law requires the Illinois Department of Revenue to calculate a tax equalization factor -- often called the "multiplier" -- to achieve uniform property assessment across the state.  The Illinois Department of Revenue certifies a final Cook County equalization factor each year (for 2011, the Cook County factor was 2.9706), then the Cook County Clerk applies the factor to the final Assessed Value, which yields the property's Equalized Assessed Value (EAV).  The EAV is then multiplied by the local tax rate; this result is your total property tax before exemptions.  Your total property tax will then be reduced by any exemptions that may apply to your property, such as the Homeowner Exemption, Senior Citizen Exemption, and Senior Freeze, just to name a few.

So, now that you know how your property tax liability is calculated, what can you do about it?  First and foremost, be sure you are getting all of the exemptions to which you are entitled.  You can apply for exemptions online at the Cook County Assessor's website (www.cookcountyassessor.com), or in person at the Assessor's office or your local township assessor's office.  In addition to ensuring that you are receiving any and all exemptions for which you qualify, you also have two opportunities to appeal (and potentially reduce) your property's Assessed Value -- at the Assessor level, or at the Board of Review: 

1.  Assessor's Office Appeal.  The Assessor's Office reassesses your home every three years using the "fair cash value" method described above.  When the assessment is determined, you will receive a "Notice of Proposed Assessed Valuation" in the mail.  This notice includes an estimate of the proposed property value and the proposed assessed valuation. The notice also includes a list of characteristics that are relevant to your home's property value.  Once you have received your "Notice of Proposed Assessed Valuation", you have approximately 30 calendar days to file an appeal with The Assessor's Office. The last date to file an appeal is printed on the top of your notice. You may also appeal your assessed valuation in any year between reassessments.  There are three common grounds for residential appeal at the Assessor Level:  (a) a Uniformity Appeal, in which you assert that the assessed valuation of your home is not uniform with assessed valuations of other similar homes; (b) an Overvaluation Appeal, in which you assert that your home has been overvalued for some other reason (i.e. a recent sales at a lower price than the assessed value; or (c) a Property Description Error Appeal, if there is an error in the Assessor's description of your property that may affect property value.

2.  Board of Review Appeal.  If you miss the deadline for filing an appeal with the Assessor's Office, or if the Assessor's Office denies your appeal, you may file an appeal with the Board of Review.  You also have the option of appealing directly to the Board of Review -- you are not required to file first with the Assessor's Office.  To appeal with the Board of Review, you must file an official complaint form, along with supporting documentation, during your township's filing period.  As with appeals at the Assessor level, some common grounds for appeal with the Board of Review are Lack of Uniformity, factual errors in your property description, recent damage to your property due to fire, flood, or other catastrophic event, or recent sale of your property for less than the Assessed Value.

Appealing your property's assessed value can be a detailed and time-consuming process.  The required forms and procedures are available on the websites of the Cook County Assessor (www.cookcountyassessor.com) and the Board of Review (www.cookcountyboardofreview.com).  While it is possible to file appeals on your own behalf, if you have questions or concerns about your property tax liability or the appeals process, contact an attorney to assist you. 

Have a legal question you'd like to see answered in a future article? Post it in the Comments section below, or email it to me at hgwalser@lavellelaw.com 

Disclaimer: This article provides legal information of a general nature and is not intended as legal advice, nor does it create an attorney-client relationship with any person or group of persons. Should you wish to obtain legal advice concerning your particular situation, contact an attorney.