{"id":357,"date":"2021-04-29T16:07:24","date_gmt":"2021-04-29T16:07:24","guid":{"rendered":"https:\/\/greystonerealtychicago.com\/?p=357"},"modified":"2021-04-29T16:11:06","modified_gmt":"2021-04-29T16:11:06","slug":"how-do-property-taxes-work-in-chicago-cook-county","status":"publish","type":"post","link":"https:\/\/greystonerealtychicago.com\/?p=357","title":{"rendered":"How Do Property Taxes Work In Chicago &#038; Cook County?"},"content":{"rendered":"\r\n<p class=\"ticss-04787985\">It is no surprise that property taxes in Illinois can get extremely complicated, especially here in Chicago and Cook County where they are often a hot topic among political leaders, property owners, and potential real estate buyers and developers.\u00a0 To navigate the complexity, lets break down how the taxes are calculated.<\/p>\r\n\r\n\r\n\r\n<p>Market Value<\/p>\r\n\r\n\r\n\r\n<p><span style=\"text-decoration: underline;\">X 10%<\/span><\/p>\r\n\r\n\r\n\r\n<p>Assessed Value<\/p>\r\n\r\n\r\n\r\n<p><span style=\"text-decoration: underline;\">X State Equalizer<\/span><\/p>\r\n\r\n\r\n\r\n<p>Equalized Assessed Value<\/p>\r\n\r\n\r\n\r\n<p><span style=\"text-decoration: underline;\">X Local Tax Rate<\/span><\/p>\r\n\r\n\r\n\r\n<p>Tax Before Exemptions<\/p>\r\n\r\n\r\n\r\n<p><span style=\"text-decoration: underline;\">Less: Exemptions<\/span><\/p>\r\n\r\n\r\n\r\n<p><strong>Total Taxes Due<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Already confused? \u00a0Don\u2019t worry, you are not alone!\u00a0 We will dissect each component of this calculation to clear up the confusion.<\/p>\r\n\r\n\r\n\r\n<p>First, an important item to note is that property taxes in the state of Illinois are paid in arrears.\u00a0 This means that the money that is paid to the county today is for last year\u2019s tax bill.\u00a0 Why are taxes paid in arrears?\u00a0 This dates to the 1930\u2019s during the Great Depression, when legislators made the decision to delay collecting property taxes for a year.<\/p>\r\n\r\n\r\n\r\n<p><strong>Market Value<\/strong><\/p>\r\n\r\n\r\n\r\n<p>So how does the county determine what your property tax will be?\u00a0 It starts with the market value of your home. The <strong>market value<\/strong> is the amount of money you would likely receive if you were to sell your property on the market.\u00a0 Every three years, Cook County does an analysis on your property\u2019s market value by evaluating similar properties recently sold in your area.\u00a0 If you live in a very prosperous neighborhood with high property values, you should expect to pay more in taxes.<\/p>\r\n\r\n\r\n\r\n<p><strong>Assessed Value<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Once the market value is determined, the assessor will take 10% of the value and refer to this as the <strong>assessed value<\/strong>.<\/p>\r\n\r\n\r\n\r\n<p>(Note: the examples below illustrate Cook County only.\u00a0 Taxation governance and procedures vary by county.\u00a0 Consult your county for its specific details).<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table alignfull\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>Market Value<\/strong><\/td>\r\n<td><strong>Assessed Value<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><strong>$250,000<\/strong><\/td>\r\n<td><strong>$250,000 x 10% = $25,000<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<p><strong>Equalized Assessed Value<\/strong><\/p>\r\n\r\n\r\n\r\n<p>From there, the state of Illinois will determine a multiplier each year for all counties, referred as the <strong>state equalizer<\/strong>.\u00a0 This multiplier is intended to make property tax rates approximately equal across all Illinois counties.\u00a0 The rate announced in June 2019 that impacts 2018 tax bills was <strong>2.9109.\u00a0 <\/strong>Multiplying the assessed value by the state equalizer, will get the equalized assessed value.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table alignfull\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>Assessed Value<\/strong><\/td>\r\n<td><strong>State Equalizer<\/strong><\/td>\r\n<td><strong>Equalized Assessed Value<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><strong>$25,000<\/strong><\/td>\r\n<td><strong>2.9109<\/strong><\/td>\r\n<td><strong>$25,000 x 2.9109 = $72,773<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<p><strong>Local Tax Rate<\/strong><\/p>\r\n\r\n\r\n\r\n<p>The next calculation in the tax bill is the actual tax rate the county needs in order to collect for services supplied by each municipality.\u00a0 This rate is set by the county clerk after each community has set their budgets.\u00a0 Many services that are paid for from property taxes are schools, pensions, water reclamation, park districts, public safety services, health facilities, mosquito abatement, etc.<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table alignfull\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>Equalized Assessed Value<\/strong><\/td>\r\n<td><strong>Local Tax Rate<\/strong><\/td>\r\n<td><strong>Taxes Due Before Exemptions<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><strong>$72,773<\/strong><\/td>\r\n<td><strong>6.786%*<\/strong><\/td>\r\n<td><strong>$72,773 x 6.786% = $4,938<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<p>*Sample local tax rate<\/p>\r\n\r\n\r\n\r\n<p><strong>Exemptions<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Finally, the county will reduce you taxes by any exemptions for which the property owner qualifies.\u00a0 These are the possible exemptions that owners may be eligible, however, there is a maximum of 4 exemptions per property.<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><strong>Homeowners Exemption<\/strong> \u2013 Eligible if owners use their property as their primary place of residence.\u00a0 Calculated as $10,000 x local tax rate.<\/li>\r\n<li><strong>Senior Citizen Exemption<\/strong> \u2013 Eligible if owners are 65 years of age or older <strong>and<\/strong> the property is a primary place of residence.\u00a0 Calculated as $8,000 x local tax rate.<\/li>\r\n<li><strong>Senior Freeze Exemption<\/strong> \u2013 Freezes the equalized assessed value of a property.\u00a0 Eligible if property owners are 65 years of age or older, have a gross household income less than $65,000, and the property is their primary place of residence.<\/li>\r\n<li><strong>Home Improvement Exemption<\/strong> \u2013 Allows property owners to make up to $75,000 in improvements without increasing the taxable market value for at least 4 years.\u00a0 Eligible property owners must have building permits issued for the improvements.<\/li>\r\n<li><strong>Returning Veterans Exemption<\/strong> \u2013 Eligible if property owners have served in the U.S. Armed Forces, Illinois National Guard, or U.S. Reserve Forces and are returning from active duty.\u00a0 A $5,000 reduction in the equalized assessed value is given for each year of returning from service.<\/li>\r\n<li><strong>Disabled Veterans Homeowner Exemption<\/strong> \u2013 Veterans with a service-connected disability are eligible for an exemption based on their percentage of disability.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li><strong>Disabled Persons Exemption<\/strong> \u2013 Eligible if property owners are disabled and the property has been used as their primary residence.\u00a0 The maximum exemption amount is $2,000.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table alignfull\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong>Taxes Due Before Exemptions<\/strong><\/td>\r\n<td><strong>Exemptions<\/strong><\/td>\r\n<td><strong>Total Taxes Due<\/strong><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><strong>$4,938<\/strong><\/td>\r\n<td><strong>Homeowner: $10,000 x 6.786%* = $678<\/strong> <strong>Senior Citizen: $8,000 x 6.786%* = $543<\/strong><\/td>\r\n<td><strong>$4,938 &#8211; $678 &#8211; $543 = $3,717<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<p>*Sample local tax rate<\/p>\r\n\r\n\r\n\r\n<p><strong>Installments<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Your annual taxes payable are split into two installments.\u00a0 The Cook County Treasurer will issue a bill for the first installment in March and the second installment in July.\u00a0 New tax rates are established and put into effect on the second installment payment.\u00a0 Your first installment will be 55% of the prior year\u2019s total tax bill.<\/p>\r\n\r\n\r\n\r\n<p><strong>Appealing Your Taxes<\/strong><\/p>\r\n\r\n\r\n\r\n<p>If you feel that the market value of your property is not reflected accurately within your tax calculation, you may appeal this value for free and potentially save hundreds to thousands.\u00a0 Every 3 years different townships throughout the county will be reassessed.\u00a0 You can find out which townships are currently being reassessed here:<\/p>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/www.cookcountyassessor.com\/Appeals\/Appeal-Deadlines.aspx\">https:\/\/www.cookcountyassessor.com\/Appeals\/Appeal-Deadlines.aspx<\/a><\/p>\r\n\r\n\r\n\r\n<p>Many attorney\u2019s specialize in appealing property taxes and they will take care of all the filing for you.\u00a0 Typically, this service is free, but the attorney will charge you a percentage of the tax savings you receive if your appeal is successful.\u00a0 You may also appeal your taxes yourself.\u00a0 <strong>It is best to file an appeal for your taxes within 30 days of receiving a notice in the mail that your property is being reassessed.<\/strong>\u00a0 To learn more about the filling process, visit the Cook County assessor site here:<\/p>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/www.cookcountyassessor.com\/Appeals\/Appeal-Forms.aspx\">https:\/\/www.cookcountyassessor.com\/Appeals\/Appeal-Forms.aspx<\/a><\/p>\r\n\r\n\r\n\r\n<p><strong>Real Estate Transfer<\/strong><\/p>\r\n\r\n\r\n\r\n<p>Since property taxes are paid in arrears, what happens when you sell your property?\u00a0 Are you still liable to pay for the taxes even though you do not own the parcel any longer?\u00a0 For the answer, I\u2019ll quote one of our founding fathers Benjamin Franklin: \u201c\u2026In this world nothing can be certain, except death and taxes.\u201d In short, yes.<\/p>\r\n\r\n\r\n\r\n<p>Although real estate taxes in Illinois are paid in arrears, when it comes to a real estate closing, the seller must pay the current year\u2019s taxes immediately at the closing table.\u00a0 This payment does not go directly to the county, instead, it is treated as a credit to the buyer and it transfers the payment obligation to the new owner of the property when the tax bills are sent the following year. \u00a0The good news is that a seller is not responsible to pay the entire year\u2019s tax bill, sellers are only required to pay a prorated amount based on the number of days they have owned the property in the current year.<\/p>\r\n\r\n\r\n\r\n<p>The real estate attorneys assisting with the transaction are required to make the tax proration calculation.\u00a0 Since it is impossible to determine the exact tax amount for the current year due to the timing of when the county sets their new budgets, the attorneys will take the prior year\u2019s full tax amount and multiply it by 100-110% (whichever rate was negotiated in the purchase agreement) to calculate an estimate of the taxes due.\u00a0 The 100-110% rates are used since it is assumed property taxes will remain constant or continue to rise the following year.<\/p>\r\n\r\n\r\n\r\n<p><strong>For more information on property taxes, please visit the following resources:<\/strong><\/p>\r\n\r\n\r\n\r\n<p><a href=\"http:\/\/www.cookcountypropertyinfo.com\/default.aspx#\">http:\/\/www.cookcountypropertyinfo.com\/default.aspx#<\/a><\/p>\r\n\r\n\r\n\r\n<p><a href=\"https:\/\/www.cookcountyassessor.com\/Search\/Property-Search.aspx\">https:\/\/www.cookcountyassessor.com\/Search\/Property-Search.aspx<\/a><\/p>\r\n\r\n\r\n\r\n<p>DISCLAIMER<\/p>\r\n\r\n\r\n\r\n<p>For questions about this article, feel free to reach out to me, but please note this document is for informational purposes only and should not be cited as an official or authoritative source.\u00a0 Contact official documents or legal counsel for further assistance before acting on your particular property tax situation.<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>It is no surprise that property taxes in Illinois can [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":359,"comment_status":"open","ping_status":"open","sticky":false,"template":"epic_custom_post_template-317","format":"standard","meta":{"footnotes":""},"categories":[8,7],"tags":[],"class_list":["post-357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-first-time-buyer","category-taxes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v16.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<link rel=\"canonical\" href=\"https:\/\/greystonerealtychicago.com\/?p=357\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Do Property Taxes Work In Chicago &amp; Cook County? - Greystone Realty\" \/>\n<meta property=\"og:description\" content=\"It is no surprise that property taxes in Illinois can [&hellip;]\" \/>\n<meta property=\"og:url\" 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