Assessor Offers Hope For Some Chicago Property Owners
There’s a glimmer of hope on the gloomy real estate tax horizon for property owners in Chicago’s wealthy neighborhoods—from River North and Old Town to Lincoln Park and Lakeview.
Cook County Assessor Fritz Kaegi currently is sending “COVID-19 assessment-adjustment letters” to thousands of Chicago property owners, noting that the pandemic has caused a “significant economic downturn, and lower property values” depending on the property’s type and location.
In Chicago, the COVID-19 assessment-value reductions average 10%. They range from about 7.5% in Lincoln Park, Lakeview and Uptown, and nearly 8% in the Loop, River North, Old Town, South Loop and Bronzeville. The reductions are about 9.5% in Rogers Park and West Ridge, and range as high as of 12% on Chicago’s South Side.
The assessor also reduced the assessments on two-flat to four-flat apartment buildings in Cook County ranging from 9.3% to 15.4%.
Mayor Lori Lightfoot’s 2021 pandemic budget will include a $93.9 million property tax hike as part of a $1.6 billion real estate tax levy. About $34 million of the real estate tax hike is linked to a future rise in the consumer-price index.
The new budget ordinance requires property owners in the future to pay either an annual property-tax increase of 5%—or an increase based on the consumer price index, whichever is lesser. The Lightfoot administration says the increases will be approved annually by the City Council.
Lightfoot has argued the “modest” 1.3% real estate tax increase to homeowners is necessary. A bungalow owner with a property valued at $250,000 will see a tax-bill increase of $56. But more expensive homes could see increases of hundreds of dollars.
Kaegi’s sweeping COVID-19 assessment-reduction move may create the illusion of tax relief, but it may not automatically provide lower taxes next year. “If everyone in your taxing district goes down at the same rate, you’ll be paying the same taxes,” explained Laurence Msall, president of the Civic Federation.
However, crystal-ball gazing into the outlook for the expected 2020 property-tax hike, payable in 2021 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 Michael Griffin, a Chicago real estate tax appeal attorney.
Homeowners should review their exemptions because they can reduce their tax bill if they have the proper exemptions applied to the bill, Griffin noted. The three primary 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 the equalized assessed value of a home to which tax rates are applied in order 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 incorrect,” Griffin advised.
Real estate taxes for 2020 are expected to rise when the second installment of the bill comes due in August of 2021. However, predicting a hefty property tax increase this year really centers on two wild cards—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 factor 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 2020 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 assessor’s website: www.cookcountyassessor.com, or call 312-443-7550 to find comparable properties or start the appeal process.
The Assessor is now concluding appeals process for 2020. A taxpayer can file with the Cook County Board of Review (312-603-5542) or www.cookcountyboardofreview.com and later with the Illinois Property Tax Appeals Board (217-785-6076), or www.ptab.illinois.gov. Or, call Michael Griffin, an expert tax-assessment lawyer, at 312-943-1789.