I'm finally getting around to finishing my series on appealing your Cook County property taxes. Last time I covered the basics, such as the overall process, the levels of appeal and the deadlines. And back in July I covered how your property taxes are calculated, how your assessed value impacts your property taxes, and the results of the 2012 Chicago re-assessment: 2012 Cook County Property Taxes: What Just Happened To Chicago. This post goes into the finer points about putting an actual appeal together, including a few things I picked up in a seminar I attended last year hosted by Anastasia Poulopoulos, an attorney who specializes in property tax appeals, and my own experience appealing my Chicago property taxes.
As I've mentioned previously, you're not really appealing your property taxes but rather the assessed value of your home, which is what drives your taxes and is the only portion of the equation that you MIGHT be able to control. So this whole process is about making a case that the county's assessed value for your home is too high and there are two fundamental ways to approach this - you can either do it yourself or you can engage an attorney to do it for you.
You probably receive about 10 letters in the mail every year from attorneys who want to file a property tax appeal for you. Usually they only charge a portion of the savings from one year - typically I see 50% - so if you are going to go this route it's best to do it in a re-assessment year so that you can get 3 years of benefits. In that case you would get to keep approximately 83% of the savings. But the benefit of using an attorney is that you don't have to lift a finger.
I filed my appeal myself because a) I wanted the learning experience b) I thought I would put more effort into my unusual situation than an attorney looking for a quick hit would and c) I'm cheap. A year after my successful appeal I authorized a law firm to appeal my taxes just to see what would happen. I never heard from them again, which I took to mean that they concluded that there was not a lot of opportunity there. In my mind that confirmed (b) above, though I had already done the heavy lifting.
Although the process can seem overwhelming or intimidating it's not as bad as you might think. The trick is to follow the instructions and come up with a solid argument as to why your home is assessed too high and present it well. And the county is looking for one of 7 different arguments, which can be broadly grouped as :
- Lack of Uniformity - your home is not in line with the assessed value of other homes in the area. This is the most common argument made.
- Overvaluation - the assessed value is not in line with the market value of your home as suggested by what you paid for it or what similar homes have recently sold for. I suspect this is a harder argument to make than lack of uniformity.
- Bad information - the county is incorrect in what they think you own - e.g. house is much smaller than they think, damaged by fire, building doesn't exist, etc...
One of the more surprising things that I got out of Anastasia's seminar was that it's really hard to get the county to factor in the condition of a property - i.e. if you live in a run down house you are probably going to be over-valued. That was my challenge. I had bought a short sale that needed a lot of work for a lot less money than the county had my property valued for. The homes they comped me against were much newer and in much better condition than my house. Even though I supplied them with interior photographs of my and several other homes and my closing statement they flat out rejected my appeal the first time and then gave me a modest, but acceptable reduction at the second level of appeal.
Anastasia all but said that the county just doesn't care about the condition of a property. And they won't look at distressed sales for comparables even though these might be bringing down neighborhood values. Shoot. I think that if the city thinks that a house is worth more than the homeowner thinks it's worth they should be forced to buy it from the home owner at that price. I think that would introduce a lot more integrity to the process.
You can file your property tax appeal online or you can download the forms and submit the appeal by mail. I opted to file the appeal by mail because I needed to submit a lot of documentation (photographs, closing statement) that I did not see a way to submit online. The forms and guidelines are available under Cook County Property Descriptions and Appeal Forms. It's good to review the guidelines even if you are going to file your property tax appeal online and note that there are different forms and guidelines for condos vs. single family homes.
When you file it online all they are interested in is the properties you are comping against. All you have to do is type in the PINs for those properties - up to 6 - and you are done. They will even pull up a list of what they think are comparable properties and you can check them off.
It looks like there is no minimum number of comparables required to file the appeal online (I think it will accept none but how well do you think that will work?) but Anastasia suggests at least 3 in the same neighborhood, same class, and with the same features as yours - all of which are listed on the assessor's tax records for every property. Clearly the Cook County Assessor is single mindedly focused on RELATIVE values in the neighborhood, which results in entire neighborhoods being either over or under valued relative to market value.
You can hire a professional for $300 - 600 to produce a property tax appraisal (different from the kind done by lenders) but Anastasia doesn't think they are worth it. She only uses them 5% of the time when she needs a bit of extra help and they do not help you defend the appeal.
As I mentioned last time I had to file an appeal with the Cook County Board of Review after my initial appeal got declined. If you decide to go that route be sure to follow these 30 simple rules of the Board Of Review Of Cook County. Yeah, 30. You can even make your argument in person at a hearing if you want but that is probably too intimidating for most people.
Anastasia pointed out that there are typically 4 reasons that people don't get their property taxes lowered, all of which are code for "they should have gotten an attorney":
- They miss the deadlines - the windows are fairly narrow
- Their evidence is poor
- Their presentation of the evidence sucks (my word)
- They don't have the time to do the appeal at all or to do it right
If you live in a condo building it is possible for you to appeal the property taxes for just your unit but that's really hard to do since all the other units in your building are typically in line with your unit. Usually the whole building bands together and hires an attorney to file an appeal for the entire building.
And, as I mentioned last time, there is a fifth level of appeal available to you through the Illinois Property Tax Appeal Board. Anastasia said that these guys can take 2 - 5 years to hear your case but if they rule in your favor you will get a refund for overpayment for all the time that has passed plus 5% interest. However, if these guys turn up additional information (and they can come into your house) that suggests that your assessed value is too low then they can actually raise your assessed value and hence your taxes.
One last point that Anastasia made is important for home sellers when they win an appeal and it's not yet reflected in their historic tax records. When it comes time to handling the property taxes for closing it is better to escrow money for the past taxes than to do a standard proration based upon the historic numbers, which are likely higher than the taxes not yet paid. The buyer is not going to give you full credit - maybe even no credit - for the forthcoming property tax reduction. By escrowing the money you pay exactly what you should pay and no more. And escrowing is also a better alternative for buyers who have reason to believe that the property taxes will be going up.
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