Homeowners throughout Chicago are starting to get a nasty surprise in their mailboxes - significantly higher property tax assessments. What I am referring to here is not the property tax bill itself but the notice of their new Cook County assessed property value which will be used to determine their property tax bill for 2018. The county reassesses the value of properties every 3 years and this is the year.
What people are finding in these notices is increases well into the double digit percentages. Rogers Park Township (not the community area but the township) notices were mailed out April 23 and the median assessed value went up by 18.0%. Lake View Township notices were mailed out May 7 and the median assessed value went up by 31.9%!
The Cook County Assessor's Web site has a schedule of notices, appeals, and closing dates with links to the valuation statistics. If you look at the valuation statistics you will see that their median percentage changes are different than what I show above. That's because I have no idea how they come up with their percentages. Good luck trying to get someone who answers the phone at the tax assessor's office to explain a mathematical calculation to you: "Is it the percentage change in the medians or is it the median of the percentage changes? What's in the numerator? What's in the denominator?" You can imagine how that conversation went. Above, I just took the percentage change in the medians.
Anyway, people are totally freaking out because they see a 30% increase in their assessed value so they assume their property taxes are going to go up by 30%. Well, fortunately, it doesn't work like that so don't immediately panic when you get that notice. What these new valuations determine are the allocation of property taxes across the county. Remember, the county determines how much money they need every year, independent of these assessed values, and then that tax burden is spread throughout the county based on the assessed values via the property tax rate.
So, if everyone's assessed value went up by 50% nothing would change. The tax rate would just go down by 33.3% to bring everything back in line. What will kill you is when your home's assessed value goes up more than the aggregate value of all Cook County homes. So we can tell from what we know already that more of the property tax burden is about to shift to homes in Lake View Township from Rogers Park Township. And, in all likelihood, the property tax burden will probably shift from the south and west sides to the rest of the city. And that's how it should work - if you believe that property taxes should be based upon current values as opposed to what someone paid for their home.
Nevertheless, knowing all this shouldn't discourage you from taking aggressive action to reduce your valuation. What I always tell people is that you should always appeal your property tax assessed value every chance you get - unless you already have a ridiculously low assessed value. You probably have a pretty good idea of what your home is worth (well, you probably think it's worth more than it is) so I'd say that unless you are at least 15-20% below that you might as well appeal. But pay close attention to those deadlines displayed at the link above.
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.