Remodeling a house might cost more than just the final price bill paid to the remodeling company. It could also cause an increase in the property tax bill.
Cost Vs. Value
Any time a house is updated through a remodeling project, there is the potential that the project is also adding value to the home, which is good from a resell perspective but could also be used in the calculations the Cook County Assessors’ office uses to determine the value of the property for property tax purposes. So even if the tax rate remains the same, the change in assessed value will increase the property tax bill.
Every year, Remodeling Magazine updates its Cost Vs. Value assessment of various remodeling projects by how much they cost versus how much value they add to the home. For instance, in 2020, a major kitchen remodel is estimated to raise the value of the home by $72,993.
County tax assessors are tasked with tracking the value of every piece of real estate in a taxing district. In Cook County, these taxing districts are divided into three and re-assessed on a triannual basis. The tax assessors also maintain a database of local property values, using mapping software. In addition, the tax assessors monitor building and demolition permit applications to track home renovation projects, and field appraisers might drive around to look for changes in the area to see if there are projects happening without permitting.
Homes that are for sale near the property also contribute to the rise in assessed value. Assessors pull home sales information to make comparable assumptions about neighboring properties, similar to how a Realtor would. If a neighboring property sold for a lot more than its previous assessed value, that could impact similar homes within the same ZIP code from a property tax perspective.
Appealing the Assessed Value
If a property’s assessed value is reflective more of the surrounding properties than its own—because neighboring properties have been improved—then it’s time to file an appeal. Gather listings of nearby, unimproved properties or ask for help from a real estate agent to pull records of more comparable sales, meaning similar in age, square footage, the number of rooms, and also without having been remodeled recently. Use these documents to file an appeal with the Cook County Assessor’s office. Each town is provided a specific timeframe for an appeal on the property’s value.