Posted by BEST FINANCIAL GROUP LTD

Major Changes For Property Taxes in Cook County

Major Changes For Property Taxes in Cook County

Your property taxes are set to rise substantially, if you reside in certain areas of the city of Chicago. You could end up paying 11 percent more than you currently do.

The rise in taxes could be especially steep for single-family homeowners residing either in central Chicago or on the Northern area of the city.

Residents of the city could soon receive the new rates of taxation in the mail. The final estimates of the amended rates have been released by Karen Yarborough, County Clerk in Cook.

A 3.7 percent increase in property tax bills, on average, would have to be paid by property owners across the country. It does not matter whether such property is represented by commercial property or homes.

Property owners may have pay different tax rates; such variations will depend on the property type and region in which such property is located.

Consequent to the increased tax rates, homeowners in the north and central areas can expect tax bills with percentage increases of 11.46 and 11.29, respectively.

Residents in the North Side can expect to pay average increases ranging from $536.17 to $5,218.84, while homeowners in the central area could expect even higher average increases ranging from $595.60, to $5,869.64.

However, the average tax increase could be limited to 0.98 percent for homeowners in the southern areas, reflecting relatively slower growth in property values in those areas.

According to Yarborough, the average increase could be less than one percent for homeowners in suburban areas.

Owners of commercial property (office, retail or any other) can expect to pay lower increases. The classification of such increases has a similar region-wise breakdown. Respective average increases of 2.99 percent, 9.7 percent, 1.4 percent, and 1.69 percent are imminent in the northern area, the central area (including downtown), the suburban areas of the north and northwest, and the suburbs in the south and west. However, owners of commercial property in the South Side can expect an average decrease of 0.08 percent in their property tax bills.

Increases in property values are driving the increases in tax rates, as reflected in the greater average increases for property owners in the more prosperous central and northern areas.

Yarborough revealed that last year’s triennial revaluation (which these increases are part of) showed that Chicago’s real estate value rose 12.5 percent overall, the increase mainly accounted for by increases in the northern and central areas. The increases in those areas ranged from 12 percent to 20 percent.

However, total equalized assessed valuation (EAV) fell by 2 percent in the suburbs in the north, and by 3 percent in the suburbs in the south and west sides of the city.

The tax rates are calculated by combining those property values and the taxes needed to fund local governments and schools.

Consequent to the new tax rates, the burden of tax on property owners in the less prosperous south side would be mitigated by shifting part of it to owners in the more prosperous north which is witnessing an economic boom.

However, Chicago’s recently appointed Mayor Lori Lightfoot, who is having to wrestle with a $700 million deficit in the city’s 2020 budget, could find the new tax rates politically vexing.

Lightfoot might want to tap property taxes as a partial solution to the budgetary deficit. However, such a move could place the bulk of the burden on such prosperous localities as North Center, Edgewater, Lake View, and Wicker Park, areas where homeowners could be up in arms when Yarborough’s new tax rates take effect, without even accounting for any additional taxes Lightfoot may seek to impose.

That said, the quick rise in property values in parts of Chicago must be a cause for cheer, accounting for the lower tax rate that is incidental to the overall increase in revenue from property tax.

Yarborough has revealed that property value in the county is currently at $14.9 billion, an increase of 5.1 percent over the previous valuation of $14.4 billion.

The new tax rates will become effective from August 1.

Caveat for prospective protestors: rather than determine the total revenue that the government seeks, Yarborough helps allocate such revenue -- via new assessments – to determine how much a particular property owner can expect to pay.

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