In Chicago, specifically referencing Cook County, property taxes rose in 2018 & everyone is left wondering – What now?
This year, 2018, was a reassessment year for all of Chicago, so homeowners & hopeful homeowners will receive increases – for example, I had clients who’s taxes went up a shocking 83%.
So, as a Seller, should you lower your asking price because of rising taxes? As a Buyer, should you low ball the Seller & justify your offer price due to the anticipated tax increase?
My opinion to both of those questions is: No.
This past Spring & Summer we were in a Seller’s market, so the chances of Seller’s having the hindsight to adjust their asking price to outweigh the impending tax burden were slim to none. While the market is starting to stabilize into the Fall, I still advice my Buyers against submitting offers asking for a significant tax proration, due to the lack of inventory the ball was still in the Seller’s court so we need to be reasonable, but definitely take the impending tax hike into account.*
While this tax bill hit everyone with some ‘sticker shock’, we need to recognize that the previous reassessment figures sent out in the 2015 Triennial were based on 2012-2013-2014. 2012-2013 was coming off the worst real estate crash since the Great Depression, so those previous assessed values were low – because the market was artificially low.
My best advice is ALWAYS do your due diligence, talk with your Broker & Attorney on the anticipated increase & be sure to understand how it will affect your bottom line. Be aware of exemptions that may alleviate the tax burden & be explicit with your questions so you are fully aware of what you are committing to with the sale or purchase of your home. Communication is key.
The good news, if you did purchase or are currently an owner in Cook county, you can appeal & most homeowners appealing to the Assessor’s Office do not use an attorney. 51% of residential appeals to the Assessor’s Office are successful; the amount of reduction varies, however. If you are looking for more guidance I do know a great tax appeal attorney – so reach out to me to discuss your options.
If you’re appealing your property taxes:
- Someone appealing does NOT have to (do) the work. The assessor’s office will look up comparable properties for them. If someone wants to submit their own list of comparables, that is, of course, fine. We just make it clear that appellants don’t have to worry about how “long” it’ll take to file an appeal. It is a one-sided form which takes approximately five minutes.
- Appeals are for the purpose of reducing the Assessor’s valuation of a property. They do not automatically reduce a future tax bill. Dollar amounts of tax bills are decided by the tax rates and levies in individual communities (school districts, etc.). Most property tax revenue goes to public schools.
- If someone “loses” an appeal and does not receive a reduction, their assessed value will NOT go up. It stays the same for the three years between triennials (unless they appeal the following year and win).
- If you are successful in one of your appeals, the reduction will be reflected on the second-installment tax bills to be mailed in the summer of 2019.
For more information on this, check out this article.