With the change of administrations at the Cook County Assessor’s office came a change in the way property was assessed for property taxes. However, it does not seem that Realtors are changing the way they prorate taxes for the year prior, to be paid by the home seller, meaning that many new homeowners are stuck footing the rest of the bill.
Higher Assessments Don’t Always Mean Higher Taxes
Property tax bills mailed this year cover the year 2018. Therefore, when a property is sold, the buyer and seller typically agree on a dollar amount that the buyer will provide to cover the previous year’s property taxes. Realtors and lawyers involved typically ask for somewhere between 105 and 110 percent of the year prior’s bill, assuming there will be a small increase in the property taxes each year.
However, under new Cook County Assessor Fritz Kaegi, a new system is in place to determine more accurate valuations, so property assessments have been quite a bit higher than year’s previous, sometimes as high as 31 percent higher.
There are nuances to the taxing system, so just because an assessment has increased 31 percent does not translate to a 31 percent increase in the property tax bill. But another mistake Realtors and lawyers are making in the home selling process is assume that the property tax bill will go up the same percentage as the assessment.
Taxes are calculated by dividing the amount of money each taxing district requested in their levy by the total taxable value within each district, according to the 2017 Cook County Tax Rate Report. So each property’s tax bill relies on the overall taxable value of the district. If the taxable value increases, the tax rate will decrease.
Homeowners Should Check Comparables
The Cook County Assessor’s office often relies on the appeals process to bring outlier properties into alignment with the correct assessment. It’s imperative for homeowners to look carefully at the tax assessments for the property to ensure that it is comparable to the homes in their neighborhood. Property owners can do search neighboring homes by address on the Cook County Treasurer’s website.
Homeowners should make sure the properties they use for comparison are similar in age, size, and condition of their home, as this comparables would be the basis for the property tax appeal if a home was paying a lot more in taxes than nearby properties.