Cook County’s triennial assessment system means that the south suburbs are being reassessed this year, raising concerns that although residential property tax bills could drop, the commercial real estate property taxes might be inversely impacted. This could stymie the decades-long efforts to grow the region through economic development projects.
Reassessments Lead to More Appeals
Cook County Assessor Fritz Kaegi was voted in two years ago with the promise to change the way property was assessed within the county as well as to shift the tax burden from homeowners to business owners.
In his time in office, he has been through two rounds of reassessments, the latest being for the south and southwest suburbs.
In those reassessments, the median home assessment rose 4% while business and industrial properties saw a median increase of about 44%. Apartment buildings with seven or more units went up by a median of about 80%. This means that homeowners are likely to see a break on their property tax bills later this year, but that businesses might see their property tax bill be higher.
In addition, Kaegi also decided to revise assessments as COVID-19 hit the country, basis those adjustments on conditions in April 2020, when data showed declining house prices. This reduced residential property assessments even more, ranging from 8% to 12% drop, though home prices rose significantly later in 2020. Businesses also received this adjustment.
As it stands now, businesses in the south and southwest suburbs saw the total share of all assessed values drop by approximately 7.5%. Businesses are appealing these reassessments, so the total amount of the tax burden shift will remain unknown until that process is completed.
The north suburbs, which was the portion of Cook County reassessed last year, saw a shift of 10% from residential to commercial after the assessments came out; however, it ended up being closer to 2.3% after the Board of Review ruled on appeals.
What the Cook County Assessor’s office can’t control is the county’s dual system of taxation, which means that business and commercial properties are assessed for tax purposes at 25% of fair market value while residential properties—including apartment complexes—are assessed at 10% of fair market value. Commercial properties automatically carry more of the tax burden under the dual system.
It’s important for commercial property owners to appeal their assessments to the Board of Reviews to ensure the assessment amount is fair.