Attorneys At Law

Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Attorneys At Law - Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

How Illinois Property Taxes are Calculated

How Illinois property taxes are calculated and their affect on home values

Illinois homeowners pay the second-highest property taxes in the nation according to real estate data company Attom Data Solutions.

Most people will tell you they think their taxes are too high, and now you have the confirmation. Only residents of New Jersey pay higher property taxes than Illinois, with Vermont, Texas, and New Hampshire not far behind.

Of course, property taxes are essential to maintaining government services such as public schools, water lines, sewers, roads, infrastructure, parks, and libraries.

It’s not out of line though to wonder if they’are worth it.

In this post, we discuss how property taxes affect your return on home ownership and how property taxes are calculated in the state of Illinois. The method of calculation may surprise you.

 

How property taxes affect homeownership returns

  • Property taxes affect home values
  • Property taxes siphon off money that would be spent building equity
  • Second-highest cost of homeownership
  • Home appreciation prices are held in check by property taxes
  • High property taxes don’t see home values rise as quickly

Your property taxes affect home values and take away money that you could potentially spend on home improvements, paying off your mortgage sooner and building equity.

Property taxes are the second-highest cost of homeownership after your mortgage. They are a key indicator of profitability for real estate investors.

Home appreciation prices are held in check by property taxes. This can be both a benefit or a hindrance. In high-tax states, home prices don’t rise as quickly during a housing boom because people have to pay for those higher values through taxes.  On the potential upside, those same markets are somewhat more protected from wild price swings.

 

How property  taxes are assessed

Most people assume that property taxes are based on the assessment of properties.

Your property tax bill actually starts with how much the county, municipality, and taxing districts (school district, park district, library district, etc.) expect to spend.

The various taxing bodies figure out their budget based on the prior year’s budget plus an annual increase. They then figure out home much money they can expect from the state, assess the current taxable value of the property in the districts, and then the county clerk figures out the tax rate.

The county clerk calculates the tax rate based on the amount that the taxing districts are allowed to receive reconciled with the assessed property value.

In other words, taxes are based on how much they expect to spend, based on what they can get.

This can be very confusing because it is the opposite of how income taxes work. With income taxes, the more you make, the more you pay. But when your property value goes down, it doesn’t mean your property taxes go down.

 

Disputing your property tax assessment

If you think you are paying too much in taxes because your own property is not worth as much as the assessor thinks it is, you need to protest the specific assessment.

You will need to provide evidence that your property is not worth as much as the assessor thinks it is. This may include property sizes, home upgrades, location, and other factors.

There is also a time limit as to when you can contest your assessment.  For example, in DuPage County, the period during which an appeal may be filed ends thirty days after the publication of the township assessment roll. This publication date varies, but in DuPage County, it is usually in October.

 

Property tax equalization rate

Most states figure property taxes based on local budgets and assessed values, which translate to a tax rate. It can’t be that easy in Illinois though.

Illinois complicates the tax calculation by applying an “equalization” factor that figures the final tax rate up or down.

According to a 2017 press release from the Illinois Department of Revenue, the department figures out the equalization rate “for each county by comparing the actual selling price of individual properties, over a three-year period, with the assessed value placed on those properties by the county assessor and adjusted by the board of review.” 

State law requires that the total equalized assessed value of all property in Illinois counties equals 33 1/3 percent of the fair market value. The press release goes on to say that “if the median level of assessment for all property in the county varies from the 33 1/3 percent level required by law, an equalization factor is assigned to bring assessments to the legal mandated level.”

Municipalities have the right to accept or reject the equalization factor, which further complicates the issue.

When appealing your property tax bill, you must take into consideration how your own bill was assessed based on the equalization factor.

If you successfully appeal your assessment, your bill might not go down by much, or not at all, depending on how your municipality uses the equalizer.

 

Understanding this system will help you to vote and comment with an informed opinion about how the system can be improved for everyone.

 

Article Source: You know Illinois’ property taxes are sky-high. But the calculation process might surprise you. – Chicago Tribune


* Advertising Material: To the extent that the information in this post is interpreted as attorney advertising in accordance with the Illinois Rules of Professional Conduct or within the meaning of state bar rules from all other localities, this statement is made pursuant to those rules.

Specialties: Specialization claims are prohibited by Illinois Supreme Court Rules and we do not claim to be specialists. The content of this e-mail is organized and presented for the sole purpose of general information. None of the included content should be construed as legal advice. Viewing this e-mail or e-mailing the account holder does not create an attorney-client relationship. NOTICE: This page may be considered advertising material.


 

The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090


Illinois Has Second Highest Property Taxes in Nation

Illinois has second highest property taxes in nation

A recent study has concluded that Illinois has the second highest property taxes in the nation, second only to the state of New Jersey.

Complaining about property taxes is a common pastime in this country, but if you’re an Illinois resident, you can be assured that it’s not your imagination. Illinois has the second highest property taxes in the country.

The finding comes from an article “States with the Highest Property Taxes” from Realtor.com which used data from a survey “2018’s Property Taxes by State” conducted by WalletHub.com.

The Illinois statewide average effective tax rate is 2.32%, nearly double the national average according to Smart Asset. The average homeowner in Illinois pays $4,058 annually in property taxes. Many residents in Chicago and the surrounding counties pay more.

 

Top 10 states with the highest property taxes

New Jersey: $7,601 (2.4%)
Illinois: $4,058 (2.32%)
New Hampshire: $5,241 (2.19%)
Connecticut: $5,443 (2.02%)
Wisconsin: $3,257 (1.95%)
Texas: $2,654 (1.86%)
Nebraska: $2,506 (1.83%)
Vermont: $3,893 (1.78%)
Michigan: $2,185 (1.71%)
Rhode Island: $3,929 (1.65%)

 

Top 10 states with the lowest property taxes

Hawaii: $1,459 (0.27%)
Alabama: $550 (0.43%)
Louisiana: $750 (0.51%)
Delaware: $1,274 (0.55%)
District of Columbia: $2,811 (0.56%)
Colorado: $1,516 (0.57%)
South Carolina: $821 (0.57%)
West Virginia: $629 (0.59%)
Wyoming: $1,223 (0.61%)
Arkansas: $721 (0.63%)

 

Property tax bills Kane & DuPage CountyNew tax codes will be felt

For high property tax states such as Illinois, New Jersey, and New Hampshire, it will be getting even worse once the new tax code kicks in next year.

In the past, property taxes were a separate tax deduction you could take in full. Starting in 2018, property taxes will be part of a lump deduction along with state and local sales and income taxes that will be capped at $10,000, even for those married filing jointly.

 

The effect of high property taxes on Illinois

Property taxes are not just an afterthought when buying a home. They can cause buyers to steer clear of certain areas. Illinois is suffering from four straight years of population loss, and in 2017 it dropped from the fifth largest state to the sixth.

Related: High Property Taxes Sending Illinois Homeowners Towards a Cliff 

“I have shown buyers properties that they fell in love with, only to say a big fat no because the taxes were too high,” says real estate agent Denise Supplee at SparkRental.com. “So, property taxes do matter! And the new cap of $10,000 on property and other taxes will only make it more difficult for high-property-tax states.”

There are other factors in play when it comes to the overall cost of living other than property taxes.

Cook County Property Tax Assessments“Every state has their own mixture of taxes that they rely on to fund government services, primarily schools,” says Norton Francis, a senior research associate at the Urban-Brookings Tax Policy Center, a think tank.

States with lower property taxes may have higher income or sales taxes. Some states with higher property taxes have lower income or sales taxes. Some states rely heavily on surcharges for gasoline and cigarettes. Often times, areas with the highest property taxes also have some of the best schools.

Taxes are only one variable that people consider when it comes to buying a home or deciding where to move. One must also consider factors such as job opportunities, schools, and crime rates.

Even considering other factors though, Illinois’  second-highest property taxes in the country is likely contributing to the state’s population loss.

 


* Advertising Material: To the extent that the information in this post is interpreted as attorney advertising in accordance with the Illinois Rules of Professional Conduct or within the meaning of state bar rules from all other localities, this statement is made pursuant to those rules.

Specialties: Specialization claims are prohibited by Illinois Supreme Court Rules and we do not claim to be specialists. The content of this e-mail is organized and presented for the sole purpose of general information. None of the included content should be construed as legal advice. Viewing this e-mail or e-mailing the account holder does not create an attorney-client relationship. NOTICE: This page may be considered advertising material.


The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090


Sources:

2018’s Property Taxes by State – WalletHub
These States Have the Highest Property Taxes, but a Possible Loophole Offers Hope – Realtor
Should You Steer Clear of the States With the Highest Property Taxes? – Realtor
Best and Worst States for Property Taxes – The Balance
Illinois drops from the fifth-largest state to No. 6 – Chicago Tribune