26-Sep-18 – What is uniformity? In the complex world of real estate tax assessment, uniformity means that all property belonging to the same class shall be taxed alike.

According to Black’s Law Dictionary, “uniformity in taxation implies equality in the burden of taxation, which cannot exist without uniformity in the mode of assessment, as well as in the rate of taxation.”

Further, the uniformity “must be coextensive with the territory to which it applies. And it must be extended to all property subject to taxation,” so that all property owners may be taxed alike and equally, Black’s Law Dictionary notes.

Announcing that the “real estate market is healthy again,” Cook County Assessor Joseph Berrios (left) decreed that the market value for homes, townhomes, and apartment buildings with six units or less surged to $1.3 million from $1.1 million, an appreciation of more than 18 percent in only three years.

As a result of the assessor’s new, improved “state-of-the-art” reassessment model, Berrios declared that the median assessed value of one-to-six-unit properties increased to $129,082, a whopping gain of 23.32 percent.

In 2018, the entire City of Chicago was reassessed. 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. Some 65,000 homes, townhomes, and small apartment buildings were reassessed in North Township, along with 5,000 condominiums. The assessment level is 10 percent of market value for residential property.

Despite the assessor’s “improved” assessment model, which is designed to create value uniformity among similar properties, there obviously are bugs and mice residing in the state-of-the-art computerized system.

“The assessor hiked the estimated fair market value of my vintage three-flat 93 percent to an astronomical $1,973,610 from $1,021,100,” said a 73-year-old property owner. The 2017 real estate tax bill on the building was $21,981. Next year the bill could double to $40,000.

“Are they assessing this nearly 130-year-old property as if it is new construction?” he asked.

The property was purchased for around $900,000 in 2000. It is landlocked with no alley. There is no garage and no off-street parking. The elderly owner, who is retired and on a fixed income, must pay a young helper to roll out the garbage cans to the curb and back every week.

“The property’s gangway and street are rat-infested because of nearby Pipers Alley restaurants,” the owner said. “Although the property is within the boundaries of the Old Town Historic District, there is an abandoned building nearby. This block is not the Gold Coast.”

Lower assessment increases in neighborhood make case for reductions

Michael Griffin, a Chicago real estate tax appeal attorney, said the Old Town property owner likely has a strong case for a hefty reduction from the new assessment of the building. Similar properties in the neighborhood received reassessment increases of only 28 to 34 percent and could be good comparables.

Here are other examples of property reassessments in Old Town...

• The assessor said the 2018 estimated fair market value on a historic red brick six-flat near Crilly Court rose a hefty 34 percent to $1,373,510 from $1,022,100. The assessed value jumped to $137,351 from $102,210. Paid in 2017, the 2016 tax bill on the property was $20,708.

• The 2018 estimated fair market value on a historic landmark row home on a quiet one-way street shot up 33 percent to $850,280 from $639,420. The assessed value has jumped to $85,028 from $63,942 since 2015.

• The assessor said the estimated fair market value of an adjoining historic landmark two-flat rose to $823,880, up 33.3 percent from the $617,820 assessment three years ago.

• The 2018 estimated fair market value on a historic three-flat on busy Lincoln Avenue rose 28 percent to a whopping $1,010,380 from $789,320. The assessed value jumped to $101,038 from $78,932.

Old Town and Lincoln Park aren’t the only neighborhoods being whacked with sharply higher reassessments. A Logan Square graystone three-flat owner was surprised when the assessor said his property’s fair market value rose 72.8 percent to $732,630 from $424,010. The building is within walking distance to the CTA Blue Line. The assessed value jumped to $73,263 from $42,401. The graystone owner raised the question of uniformity because the assessor set the market value of several nearby properties much lower. For example, a nearby vintage brick nine-flat only received a 16.3 percent assessment increase. Its estimated market value now is $711,760, up from $612,160.

The assessor’s lofty market value increases translate into sharply higher assessed values. That could spark some mind-bending real estate tax hikes when bills arrive in 2019, analysts say.

In Chicago, the 2018 expected property tax bill increases will come due in August 2019, when the second installment of the bill arrives. Many North Side apartment building owners are planning hefty rent increases next year to pay the expected sharply higher 2018 tax bills, experts say.

Appeal assessments before next year’s tax bill arrives

Mayor Rahm Emanuel says the city needs to raise hundreds of millions of dollars in new revenue to pay for a $28 billion pension shortfall for teachers, police officers, and firefighters. However, crystal ball gazing into the outlook for the expected 2018 property tax hike, payable in 2019, 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 (right). “In 2018, a triennial tax assessment year in Chicago, homeowners should appeal their assessment because they are likely to see a new higher assessment.”

Homeowners also should review their exemptions because they can reduce their tax bill if they have the proper exemptions, Griffin noted. The three main exemptions are the Homeowner’s, Senior Citizen, and Senior Freeze.

The Homeowner’s 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 individual tax bills.

Also, more seniors are qualified 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,” Griffin advised.

Real estate taxes for 2018 are expected to rise when paid in 2019. However, predicting a hefty property tax increase next year really centers on two wildcards – the tax rate and the state equalization factor, which can’t 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 multiplier was pegged at 2.9627 in 2017, up from 2.8032 in 2016.

The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2017 tax bills will see the continued increased spending for schools and police, firefighter, and teacher pensions.

Chicago’s 2017 tax rate rose slightly to $7.266 per $100 of assessed valuation, up from $7.169 per $100 of assessed valuation in 2016.

“The 2017 tax rate in Chicago was higher and so was the state equalization factor,” noted Griffin. “With the sharply higher 2018 assessments in the city, the multiplier and the tax rate should go down if the amount of money that local governments request remains the same as last year.”

Griffin said another problem is that the assessment increases vary from small to large for Chicago homeowners, “so everyone should appeal their assessment to reduce the assessment increase to as small a level as possible.”

Property owners who think they are over-assessed should appeal now before they receive next year’s tax bill. If they wait until the tax bill arrives in 2019, it will be too late to appeal the dramatic 2018 assessment increase.

Visit the assessor’s website at www.cookcountyassessor.com or call 312-443-7550 to find comparable properties or start the appeal process. Only two city townships, North and South, are open for filing at the assessor’s office. Deadlines for filing at the assessor’s office already have passed for other city townships. However, property owners still can file an appeal with the Cook County Board of Review – www.cookcountyboardofreview.com or 312-603-5542 and the Illinois Property Tax Appeals Board – www.ptab.illinois.gov or 217-785-6076. Or, call Michael Griffin, an expert tax assessment lawyer, at 312-943-1789.