Skyrocketing property taxes are nothing new to Cook County residents. The cumulative effect of years of high property taxes is causing residents to rethink remaining in homes even though they have completed mortgage payments.
Exemptions No Help
Gentrification is also somewhat to blame in some Cook County suburbs, because as home values rise, so, too, do property taxes. For elderly property owners, who have worked a lifetime to pay off mortgage payments, there is a double-edged sword as they withdraw money from their 401(k)s to pay off property taxes because that money then counts as “income,” and pushes them over the $65,000 income threshold to qualify for a senior tax exemption or freeze.
Gentrification and the “flipping” of homes in these areas have impacted the value of properties that haven’t been upgraded or remodeled, so the value isn’t necessarily comparable to the new construction that has sprung up around these neighborhoods.
Longtime property owners who own two-flats or other types of buildings that allow for rental space struggle to balance offering affordable rents with their near inability to pay off the property taxes.
And there’s no break in sight. The City Council just approved a $93.9 million tax hike to offset Chicago’s pandemic budget deficit, and there are still underfunded pensions to pay into for the state.
One of the avenues available to longtime property owners, even if they do not qualify for the senior tax exemption or freeze, is the long-term homeowner’s exemption. This is available to those who meet the following requirements. Owners must have:
- Owned and occupied the property from Jan. 1, 2010, to Jan. 1, 2020
- A total household income of $100,000 or less for income tax year 2019
- A property assessment increase that was significant enough to exceed the maximum amounts set by the state legislature.
The Cook County Assessor’s Office is supposed to automatically detect properties that fall into these thresholds to alert them. There are fewer than 2% of homeowners that qualify for this exemption, or approximately 11,000 properties in Cook County.
According to Cook County Assessor Fritz Kaegi, who was voted in several years ago to fix the inequities of the Cook County assessment system, residents of many neighborhoods are impacted by years of “distorted” assessments. These were mainly on commercial properties that were under-taxed. This shifted the burden to residential property owners.