1 Property Tax 101 Understanding the Property Assessment and Tax Process July 31, 2014 Presented by Senator Christine Radogno 41 st District Representative Jim Durkin 82 nd District Representative Ron Sandack 81 st District
2 Ground Rules Please hold questions until the end. We will open up for Question and Answer time at the end of the presentation. We can discuss assessments and taxes in general, but we may be unable to answer questions about any individual parcel in this format. We will also be available to stay after for any questions we may not be able to answer in the allotted time we have for the presentation.
3 The Tax Cycle In DuPage County: State Legislature makes the laws; Each Taxing Body sets its own levy; Township Assessors develop values; County Supervisor of Assessments equalizes values; County Board of Review hears and acts on assessment complaints; County Clerk receives and revises tax levies, and develops tax rates; and County Treasurer sends out the bills.
4 Limits on Tax Levies Tax levies are limited by: Limiting Rates (not applicable to all levies) The Property Tax Extension Limitation Law (PTELL) New Construction The voters, through referendum
5 Property Tax Extension Limitation Act 1991 TAX CAP LAW Limits increases in funds for Districts from year to year to 5% or the Consumer Price Index (CPI) whichever is lower, regardless of changes in assessments
6 PTELL Background Tax (Extension) Cap Created to prevent taxing bodies from balloon levying Does not restrict individual tax bill changes Enacted 10/01/1991 for Collar Counties Expanded to Cook County on 02/12/1995 May be adopted by referendum in other counties Prior to PTELL: Average annual tax bill increase in DuPage County was +13.6% (1985 to 1990 Tax Years) After PTELL: Average annual tax bill increase in DuPage County has been +4.9% (1991 to 2010 Tax Years)
7 Districts Restricted by Property Tax Extension Limitation Law Typically Includes schools, Non-Home Rule Municipalities, parks, fire protection, the County, and Townships Maximum Tax Rate Set by State Law Property Tax Increase Limited by Consumer Price Index Adjustments Allowed for New Property, Annexation and Other Special Circumstances Tax Increase May Exceed PTELL Limitation or Maximum Statutory Rate with Voter Approval (Referendum) 184 Districts are Restricted by PTELL in DuPage County
8 Developing Tax Rates Tentative budget Notice & Hearing Approve Budget Tax Levies (what governments spend) Levy Notice & Hearing Certify Levy to Clerk Assessed Values (how spending is divided up)
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10 Where do DuPage taxes go?
11 Taxing Districts in DuPage County: 1 Forest Preserve: 1 Water Commission: 1 Airport Authority: 1 Townships: 9 Township Special Police: 4 Township Mosquito: 1 Municipalities: 39 Parks: 40 Sanitary: 8 Fire Protection: 31 Mosquito: 5 Surface Water: 3 Library: 14 Street Lighting: 1 Special Service Areas: 162 Grade Schools: 30 High Schools: 8 Unit School Districts: 10 Junior Colleges: 3 Total: 372 Individual Taxing Districts in DuPage County 188 Are Exempted from Property Tax Extension Limitation Law
12 Definition: Assessed Value (35 ILCS 200/1-55) Sec /3%. One-third of the fair cash value of property, as determined by the Department's sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for the studies were collected. (Source: P.A ; ; )
14 Assessed Value Is an estimate of value of the property initially calculated by the local township assessor. Is based upon statistical data from neighborhood property sales and individual property characteristics of record. The assessment is required to represent one-third of the property s fair market value as measured from the three prior years sales activity. Independent from the local assessment offices, the Illinois Department of Revenue annually compiles statistics comparing actual sales and assessed values to monitor the accuracy of assessed values.
15 Assessed vs. Appraised Assessed Value is determined by Mass Appraisal Method, which assuming average condition and including sales from the prior three years. Independent Appraisal Value is for a value to date, typically only looking at sales and activity within the last six months.
16 Assessed vs. Appraised EAVs must be based on: Fair Cash Value (35 ILCS 200/1-50) Multiplied by 33.33% (except Cook County) (35 ILCS 200/9-145) As of January 1 of the assessment year (35 ILCS 200/9-95) Based on the three prior years of sales (35 ILCS 200/1-55) The Case-Schiller Index shows how 3-year means can differ from current values:
17 Case-Schiller Index (National)
18 Case-Schiller Index (National)
19 Case-Schiller Index (Chicago)
20 Case-Schiller Index (Chicago)
21 Assessment Process Assessments and Equalization ensures that the tax burden is equitably distributed across boundary lines.
22 Assessment Process Assessments and Equalization ensures that the tax burden is equitably distributed across boundary lines. Exemptions and Preferential Assessments shift the tax burden from certain properties to other properties.
23 2014 Homestead Exemptions General ($6,000 Assessed) Owner-Occupied 272,677 granted in DuPage County Senior Citizen ($5,000 Assessed) Owner Occupant must be 65+ by December 31 55,061 granted in DuPage County
24 2014 Homestead Exemptions Senior Citizen Assessment Freeze Owner Occupant must be 65+ by December 31 and must be owner of record for the prior two years starting on January 1 st. Household income cannot exceed $55,000 Exempts any increases to assessed value over base year 5,414 granted in DuPage County Homestead Improvement (up to $25,000 Assessed/$75,000 market) 7,310 granted for a 4 year period in DuPage
25 2014 Homestead Exemptions Disabled Persons ($2,000 Assessed) Owner Occupant must have Class 2 disability 2,401 in DuPage Disabled Veterans (Up to $5,000 Assessed) Owner Occupant must be disabled veteran 566 in DuPage Returning Veterans ($5,000 Assessed) 10 in DuPage
26 Effects of Exemptions Exemptions Reduce the Total Amount of Taxable Assessed Value Exemptions Increase the Tax Rate Exemptions DO NOT Decrease the Total Amount of Real Estate Tax Collected Exemptions Shift the Tax Burden to Others As a Result, Exemptions Increase Individual Tax Amount for Others
28 How Do I Apply? Exemptions Granted Automatically by Township Assessor General (Residential): Granted based on sales data and billing information. Assuming your Township Assessor believes your home is owner occupied, a formal application is not required. Home Improvement: Granted when your assessed value increased due to a physical change to your owner occupied single family home. If you have a residential or improvement exemption question, please contact your Township Assessor.
29 How Do I Apply? Continued Exemptions Requiring a Formal Application with the Supervisor of Assessments Office: Senior Homestead: 65 years-old Senior Citizens Assessment Freeze: Household Income of $55,000 or Less Disabled Veterans (Standard): Service Related Disability (+50%) Returning Veterans : For the year you returned home from active duty and the following year Disabled Persons : Cannot Participate in any Substantial Gainful Activity These exemptions are applicable to the applicant s primary residence only, that is owned by the applicant(listed on the deed), and where the applicant is responsible for the payment of the real estate tax.
30 How Do I Appeal My Assessment? Informal Appeal: Contact your Township Assessor Timeframe: The sooner, the better (A safe bet is by June outside of Cook Co) Process: Provide documentation of concern Fair Cash Value: Sales data of subject property and/or comparable properties, appraisal Equity of Assessed Value: Analysis of subject property s assessment and comparable properties Contention of Law: Disagreement with interpretation of Property Tax Code Note: The Township Assessor is empowered to alter the assessment on your behalf without you filing a formal appeal. You do not need to hire a property tax attorney, representative, or appraiser at this point. Your elected assessor and designated their staff are there to assist in this process.
31 Grounds for Successful Assessment Appeal Overvaluation Unequal Treatment (Equity) Contention of Law My Taxes are Too High!
32 Overvaluation Assessment Appeal The assessment implies a fair cash value above the three year median estimate of market value. I recently purchased my home for $300,000, yet the assessment translates to fair cash value of $500,000. Appropriate Evidence: Sale price and terms of subject property, comparable sales, appraisal, etc.
33 Unequal Treatment (Equity) Appeal Assessed Value is not reasonable in the context of the value placed upon other similar properties. There are 10 nearly identical homes as mine within my subdivision, my house is assessed $50K more that all of the others. Appropriate Evidence: Equity comparison. Using units of comparison are helpful such as comparing the assessed value per square foot of living area of the subject and comparable homes.
34 Contention of Law Disagreement with the interpretation of a specific portion of the Property Tax Code. I own a 50 acre farm and I was denied the preferential agricultural assessment. Appropriate Evidence: Cite relevant statue and explain the applicability to the subject property.
35 How Do I Appeal My Assessment? - Continued 1 st Formal Step: County Board of Review Timeframe: As soon as the assessment is officially set by township assessor. (Townships by statute must complete their re-evaluation on or before 11/15/2014) Process: File a timely assessment appeal form including appropriate value and/or assessment documentation. Please see Board of Review Rules of procedural information. (available on
36 How Do I Appeal My Assessment? - Continued 2 nd Formal Step: Property Tax Appeal Board (PTAB) State Level Timeframe: You may appeal this decision to the PTAB by filing a petition for review within 30 days after County Board of Review notice is mailed. Process: File a timely assessment appeal form including appropriate value and/or assessment documentation. Please see Illinois Property Tax Appeal Board of procedural information. (available on
37 Assessment Appeal Track Township Assessor (Informal Not Required) County Board of Review (Formal: Administrative) Circuit or Appeal Court (Formal: Civil) Illinois Property Tax Appeal Board (Formal: Administrative) Civil Court Appeal (Formal: Civil) Administrative Review (Formal: Administrative)
38 Developing Tax Rates Tentative budget Notice & Hearing Approve Budget Tax Levies (what governments spend) Tax Rates (where they meet): (Billable EAV Tax Levy) Levy Notice & Hearing Clerk Calculates Tax Rates Certify Levy to Clerk Treasurer Sends Tax Bills Assessed Values (how spending is divided up) Township Assessor Values SOA Review/ Equalize Change Notices BOR Hearing Certify Values to Clerk
39 Individual Bill Calculation Home Value $300,000 = $100,000 Assessed Value Assessed Value $100,000 Less General Exemption -6,000 Less Senior Exemption -5,000 Total Billing Value =$ 89,000 Tax Rate X Tax Bill Total = $4,928.82
40 Tax Cap Calculation District Extension X C.P.I. (funds received) Total Assessed Value of the District New Construction = Limiting Rate Example: $26,000,000 X 3.3% $960,000,000-31,000,000 =
41 2013 Property Tax Bills In the 2013 tax year, assessed values of homes dropped by a median rate of 7.4%. However, tax bills for those same homes increased by a median rate of 0.3%. 47% of homeowners have bigger tax bills than last year, even though their assessed values were lower. Data for DuPage County 2013 taxable year
42 Whom Should I Call? Taxing Body Levies and Rates: The Individual Tax Body as listed on your property tax bill. (ex. School District, Municipality). List available online at: DuPage County Clerk (630)
43 Whom Should I Call? Assessments of Individual Properties: Your Local Assessors Office Lisle Township Assessor (630) Downers Grove Township Assessor (630) Assessment Appeals or Exemptions: DuPage County Assessment Office (630)
44 Whom Should I Call? Tax Bills: DuPage County Treasurer (630)
45 Questions and Discussion Thank You! Warren L. Dixon III, CIAO Naperville Township Assessor John Trowbridge II, CIAO Lisle Township Assessor Theresa A. Cockrell, CIAO Downers Grove Township Assessor