Each year, the Civic Federation releases its Effective Property Tax Rates report, which looks at two and 10-year trends in estimated effective tax rates for all properties—including residential, commercial, and industrial—in select northeastern communities in Illinois. The report highlights that in the period between 2007 and 2016, effective tax rates increased in Cook County.
Effective Property Taxes Increase in 10-year Period
The effective property tax rate is the estimate of the percentage of a property’s full market value owned in property taxes during a given tax year. In Cook County, all but four communities—Chicago Heights, Orland Park, Arlington Heights, and Elgin—experienced an effective property tax rate increase on residential property in tax year 2016 compared to 2015. The City of Harvey’s residential effective property tax rate remained flat but still had the highest effective tax rate of the selected counties, at 6.90%.
In addition, the report found that although the effective property tax rate on residential properties didn’t increase in 2016 for Arlington Heights, over the entire 10-year period looked at in the report, Arlington Height’s effective tax rate increased 21.7%. During that same period, Chicago Heights’ increased by 98%.
In Cook County, changes in the effective tax rate over time are due to changing actual composite tax rates, changing median levels of assessment, and changes in the equalization factor. An increase of the effective tax rate can be driven by one or a combination of those factors, though its often drive by the actual composite property tax rate.
Among the selected north suburban communities for which an industrial estimated effective property tax rate could be calculated, Elgin had the highest at 7.55%. Barrington had the lowest at 4.84%. The communities in the south suburbs couldn’t be calculated as there were not enough sales of industrial property for the Illinois Department of Revenue to compute the industrial median levels of assessment.
Although the estimated effective property tax rate can’t accurately determine the precise tax burden on specific properties, it’s useful when looking at an apples-to-apples comparison of an average property tax burden in different areas over time.
Property owners can ensure they’re paying their fair share of the property tax burden by appealing their property tax assessment when there’s been a mistake or if they feel their valuation differs greatly from their neighbors.