Although Cook County Assessor Fritz Kaegi sent COVID-19 adjustment letters to many Cook County property owners in late 2020, those might not have the impact property owners expect on their overall tax bill.
COVID-19 Adjustments Might Not Equal Lower Tax Bill
The COVID-19 adjustments were due to the fact that the pandemic caused “significant economic downtown and lower property values,” according to the assessor’s letter. In Chicago, the average assessment reduction was 10%.
For those in Chicago, this is coupled with Mayor Lori Lightfoot’s 2021 budget, which includes a $93.9 million tax hike as part of a $1.6 billion real estate tax levy. The new budget ordinance includes a requirement for property owners in the future to either pay an annual property tax increase of 5% or an increase based on the consumer price index, whichever is lowest.
Property tax bills are always based on four factors—the assessment, the equalization factor, the tax rate, and exemptions—so even if the adjustments bring everyone’s property value down, if it’s the same tax rate, the tax bill might not change much.
The main drives for property tax increases are the tax rate and equalization factor. The equalization factor is established for Cook County to bring property tax assessments in line with other parts of Illinois. The equalization factor is determined by the Illinois Department of Revenue.
The tax rate is based on the amount of money that local taxing districts ask for to operate in the coming year, plus the equalized assessed value of the property. The taxing districts will be different across Cook County, as each suburb might have a different mix of school districts, park districts, library districts, and other entities that are funded by property taxes.
The best way for a property owner to ensure they’re paying the fair amount of property taxes is to double-check the property’s assessment and appeal it if it is based on faulty information or seems higher than comparable properties in the area. In addition, there are a number of exemptions that property owners can use to lower their overall tax bill. Those who live on the property as a primary residence can reduce the assessed value by up to $10,000, and senior citizens who are 65 and older can lower their assessed rate value by $8,000.