How do property taxes in Cook County work?

How do property taxes in Cook County work?

The highest property taxes in the United States is found in Illinois. The state has an overall average effective tax rate of 2.32% which is almost double of the national average. Most homeowners pay an average payment of $6, 000 per year and above while an average homeowner pays $4, 058 per year in property taxes. The reason why Illinois property taxes is high is that there are over 8, 000 different taxing authorities in the state. The collected property taxes go to the city government, county government, school districts and other local services and projects. Don’t be surprised if taxing districts such as fire protection districts, sanitary districts, and park districts also appear on your tax bill.

If you’re currently thinking of purchasing a property in Cook County, one of the many counties of the State of Illinois, you will have to get yourself ready with the overwhelming high property taxes that may come your way. Read on to find out the tax rates and other tax-related information in Cook County that you must know about before getting involved in the Real Estate business.

How do property taxes in Cook County work?

There is an estimated two-year cycle for property tax assessments and collections happening in all the counties of Illinois including Cook County. During the first year, the market value for every home in the County is appraised by the local assessing official. Most of the counties in Illinois has an assessed value of the property of 33.33% of the market value of the residential property. The assessment ratio in Cook County, however, is different. The ratio is 10% on residential property and 25% on commercial property.

After assessing the values of the properties, the county boards will then review the values provided to determine their accuracy. They can equalize assessed values on a certain property in a district is appraised half of its value. The equalization doubles the assessed value of all the properties in the district.  

On the other hand, property owners can have the chance to protest their assessed value at the county’s board. They also have a choice to appeal to the State Property Tax Appeal Board or the circuit court if they find the board’s decision as unsatisfactory.

Increased Property Tax Exemptions in Cook County

The Cook County has a General Homestead Exemption equal to a $7, 000 reduction in assessed value in Cook County while other counties have $6, 000. The General Homestead Exemption is the most important exemption there is in Illinois among the other exemptions reducing the assessed value of properties. This exemption is only applicable for homeowners with their own principal residence. On the other hand, the Senior Citizens Homestead Exemption, included in the most significant exemptions there is the county and other counties as well also state that if you are 65 years or older and has a primary residence only, then you are qualified for this benefit. There is a reduction of $5, 000 in assessed value with this kind of exemption.

The good news is that the Cook County homeowners will soon be enjoying an increase of property tax break that other counties won’t. The previously $7, 000 homeowners exemption and $5, 000 senior citizen exemption will increase by $3,000 as Gov. Bruce Rauner recently signed a legislation stating the increase. The changes and effects of the exemption increase will be felt by taxpayers on the second installment of their property taxes next summer.

How does Cook County calculate tax rates?

Calculating the tax rates in Cook County starts with the Assessor’s Office arranging property valuations. The taxing districts then file their levy requests at the Clerk’s Tax Extension Unit. In order to determine the revenue being requested, the levy is then used by the Tax Extension unit to find out the amount that needs an “extension” against all other properties within the taxing district boundaries. The Clerk’s Tax Extension Unit will determine how much the rate is going to be per $100 of taxable value generating the revenue requested. It will be based on the value of the taxable property within the district.

How low is the property taxes in Cook County compare to other counties? 

Cook County may be the largest county in Illinois with more than 40% of the overall number of state residents, but their property tax rates are lower than the state average. The County only has an average rate of 2.14% while the average while the state has a 2.32% tax rate. However, due to the state equalization factor of 2.8032 for the year 2016, the assessment level of 10% for residential property in Cook County is more or less erased. The reality is, Chicago still has the lowest property taxes amounting to $3, 538 annually while the Cook County has an average of $4, 696 of property taxes paid by every homeowner.

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