Since I'm personally staring at a 45% property tax increase for 2015 I'm spending far too much time thinking about Chicago property taxes. I already tried to appeal mine myself but made little headway at the first level so I'm bringing in professional appeal attorneys to take it to the next level - the Cook County Board of Review. In the meantime I decided I would like to do everything I can to ensure that each and every one of you are agonizing over this topic as much as I am. Misery loves company.
The Chicago property tax picture is pretty dire. Let's start by putting things in perspective. Illinois, at 2.32% has the second highest property tax rates in the country according to this graphic from a Tax Foundation blog post: How High Are Property Taxes In Your State?
Now, apparently Chicago has historically run below the Illinois average because the effective rate here has been more like 1.9%. However, with Rahm Emanuel's property tax increase the rate is going to go up at least 11.3%, which would take the property tax rate to 2.1%. But the mayor decided to exempt homes valued below $250,000 so that means that even more of the tax burden will be shifted to the homes above $250,000 so the tax rate is going to be something north of 2.1%. (This is a great way to get re-elected as long as you don't have to worry about your police department.)
However, as the Chicago Tribune reported, at least one of the rating agencies noted the "property tax increase is “a positive step,” but the city’s current $20 billion debt to its pension funds will continue to grow for at least another decade." Not to mention that the Chicago Teacher's Union is ready to go on strike if they don't get what they want in the current contract talks. And Moody's just lowered Chicago Public Schools credit rating yet again while warning that the rating could drop even more. You know that all of this has to mean that more property tax increases are coming down the road.
Now, if you also happen to live, like me, in one of the hot real estate areas of the city you are going to get the double whammy of the increase in the tax rate and the increase in your assessed value. Dennis Rodkin did a nice job in Crain's of identifying the neighborhoods that are going to be hit the hardest and, yes, mine is #2 on the list: Property tax bills will jump the most in these Chicago neighborhoods. Normally I like to go to the original source of data like this but the Cook County Assessor's site is so messed up that you can no longer see the boundaries of the township neighborhoods and nobody that answers the phone there either cares or knows what's going on. So I'll just trust Dennis on this one.
The bottom line is that people who know how to look ahead are getting scared by where Chicago is heading and carefully considering their options. I have one investor that just wants to dump all his investment properties this year before the giardiniera really hits the fan.
#PropertyTaxes #ChicagoBudget #ChicagoPolitics
Gary Lucido is the President of Lucid Realty, the Chicago area's full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think he's the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.