Reeling from years of real estate tax increases, Ma and Pa owners of small apartment properties are wondering what hikes are on the horizon for 2020.
15-Mar-20 When the first installment of 2019 Cook County real estate tax bills recently arrived in property owners mailboxes, it included an automatic 2019 first installment estimate based on 55 percent of the 2018 total taxes. The first installment was due March 3, 2020.
All money-saving exemptions, such as homeowner and senior exemptions, are reflected on the second installment which is due August 1.
The 2018 reassessment of North Township which includes the wealthy Gold Coast and the upscale neighborhoods of Old Town and Lincoln Park has left thousands of longtime property owners flabbergasted. The 2019 reassessment of the north suburbs may have the same effect on those homeowners.
Some 65,000 homes, townhomes, and small apartment buildings were reassessed in 2018 in North Township, along with 5,000 condominiums. The assessment level is ten percent of market value for residential property.
(Left) Homes in Lincoln Park. Photo by Jon Bilous.
The market value for homes, townhomes, and apartment buildings with six units or less in these prime neighborhoods surged to $1.3 million from $1.1 million, an appreciation of more than 18 percent in only three years. The median assessed value of one-to-six-unit properties increased to $129,082, a whopping gain of 23.32 percent.
The assessors lofty market value increases translated into sharply higher assessed values and sparked some mind-bending real estate tax hikes when bills arrived.
For many of the properties, the assessments have increases ranging from a manageable 12 percent to an excessive 112 percent, according to a spot survey by The Home Front.
In 2019, Michael Griffin, a Chicago real estate tax appeal attorney, urged North Side property owners to file appeals of the new assessment. Many owners did and earned substantial reductions, especially at the Board of Review.
For example, after the owner of a vintage Old Town three-flat was hit with an astronomical 93 percent assessment hike to $197,361, a successful appeal at the Board of Review reduced the assessed value 28 percent to $141,919.
However, based on the final 65 percent assessment increase, the 2018 tax bill still jumped a hefty 27.5 percent to $28,033 from $21,991 in 2017.
Griffin said the property owner likely has a strong case for further reduction in 2020 by appealing at both the Assessor and Board of Review levels because many comparable properties in the neighborhood only received reassessment increases of 28 to 34 percent.
Here are other examples of successful assessment appeals...
The owner of a historic red brick six-flat in Lincoln Park filed an appeal when the assessed value of her building jumped 34 percent to $137,351 from $102,210. The Board of Review reduced the assessment nearly 19 percent to $111,443. The property owner was relieved to learn that the 2018 tax bill rose only $59 to $21,335 from $21,276 in 2017.
A Logan Square greystone three-flat owner was shocked when his propertys fair market value skyrocketed 61 percent to $683,000 from $424,010. The assessed value jumped to $73,263 from $42,401. After an appeal, the assessed value was reduced to $68,300. After the successful appeal to the Board of Review, the 2018 tax bill still jumped a whopping 52.5 percent to $12,812 from $8,401 in 2017.
(Left) Greystones in Logan Square.
Irving Park. The 2018 assessed value on a red brick six-flat in the Old Irving Park neighborhood jumped to $94,919 from $44,835. After a successful appeal to the Board of Review, the assessed value was lowered 25.8 percent to $70,420 from $94,919. However, the 2018 tax bill still jumped a hefty 43.3 percent to $13,888 from $9,688 in 2017.
North Lincoln Square. The 2018 assessed value on a 1920s yellow brick four-flat in the Arcadia Terrace section of the neighborhood increased to $50,658 from $36,010. After a successful appeal to the Board of Review, the assessed value was lowered 22.1 percent to $39,435 from $50,658. The 2018 tax bill rose only $38 to $7,789 from $7,751 in 2017.
Tax hikes coming in August
In the north suburbs, the 2019 expected property tax bill increases will come due in August 2020, when the second installment of the bill arrives. Many North Side apartment building owners instituted hefty rent increases last year to pay the sharply higher 2019 tax bill.
However, crystal ball gazing into the outlook for the expected 2019 property tax hike, payable in 2020, is cloudy, experts say.
The property tax bill is determined by four factors: the assessment, the equalization factor or multiplier, the tax rate, and the exemptions, said Griffin.
Homeowners also should review their exemptions because they can reduce their tax bill if they have the proper exemptions applied, Griffin noted. The three main exemptions are the Homeowners, Senior Citizen, and Senior Freeze.
The Homeowners exemption recently was increased to $10,000 from $7,000, and the Senior Exemption was hiked to $8,000 from $5,000. Those amounts are deducted from equalized assessed value of a home to which tax rates are applied to determine the individual tax bill.
Also, more seniors can qualify for the Senior Freeze because the Illinois Legislature increased the maximum annual income to receive the freeze to less than $65,000 from less than $55,000.
Every homeowner should review their last tax bill to see if they received the proper exemptions and contact the assessor if the exemptions are wrong, advised Griffin (right).
Real estate taxes for 2019 are expected to rise when paid in August 2020. However, predicting a hefty property tax increase this year really centers on two wild cards, the tax rate and the state equalization factor, which cant be challenged by taxpayers.
The equalization factor, or multiplier, is established each year for Cook County to bring property tax assessments in line with other parts of Illinois. The value is determined by the Illinois Department of Revenue.
The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2019 tax bills will see the continued increased spending for schools and police, firefighter, and teacher pensions.
Property owners who think they are over-assessed should appeal now, Griffin advises. Visit the assessors website or call to find comparable properties or to start the appeal process.
The Assessor has started the appeals process for 2020. A taxpayer can pre-file with the Cook County Board of Review and later with the Illinois Property Tax Appeals Board. Or call Michael Griffin, an expert tax assessment lawyer.
Cook County Assessors Office
Cook County Board of Review
Illinois Property Tax Appeals Board