Property Tax 101 - Christine Radogno

Property Tax 101
Understanding the Property Assessment and Tax Process
July 31, 2014
Presented by
Senator Christine Radogno 41st District
Representative Jim Durkin 82nd District
Representative Ron Sandack 81st District
Ground Rules

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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.
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.
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
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
PTELL Background
Tax (Extension) Cap

Created to prevent taxing bodies from “balloon levying”
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Does not restrict individual tax bill changes
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Enacted 10/01/1991 for Collar Counties
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Expanded to Cook County on 02/12/1995
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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)
Districts Restricted by Property Tax
Extension Limitation Law

Typically Includes schools, Non-Home Rule Municipalities, parks, fire
protection, the County, and Townships
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Maximum Tax Rate Set by State Law
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Property Tax Increase Limited by Consumer Price Index
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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
Developing Tax Rates
Tentative
budget
Notice
&
Hearing
Approve
Budget
Levy
Notice
&
Hearing
Tax Levies (what governments spend)
Assessed Values (how spending is divided up)
Certify
Levy to
Clerk
3
3
Where do DuPage taxes go?
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
Definition: Assessed Value
(35 ILCS 200/1-55)
Sec. 1-55. 33 1/3%. 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. 86-1481; 87-877; 88-455.)
1
Assessed Value
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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.
Assessed vs. Appraised
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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.
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:
Case-Schiller Index (National)
Case-Schiller Index (National)
Case-Schiller Index (Chicago)
Case-Schiller Index (Chicago)
Assessment Process
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Assessments and Equalization ensures that
the tax burden is equitably distributed across
boundary lines.
Assessment Process
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
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.
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
2014 Homestead Exemptions
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
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 1st.
 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
2014 Homestead Exemptions
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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
Effects of Exemptions
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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
2
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.
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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.
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
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Disabled Veterans’ (Standard): Service Related Disability (+50%)
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Returning Veterans’: For the year you returned home from active duty and the following
year
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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.
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)
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Process: Provide documentation of concern
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Fair Cash Value: Sales data of subject property and/or comparable properties, appraisal
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Equity of Assessed Value: Analysis of subject property’s assessment and comparable
properties
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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.
Grounds for Successful
Assessment Appeal
Overvaluation
Unequal Treatment (Equity)
Contention of Law
My Taxes are Too High!
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.
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.”
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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.
Contention of Law
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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.”
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Appropriate Evidence: Cite relevant statue and
explain the applicability to the subject property.
How Do I Appeal My Assessment? - Continued
1st Formal Step: County Board of Review
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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 www.DuPageCo.org/SOA)
How Do I Appeal My Assessment? - Continued
2nd Formal Step: Property Tax Appeal Board (PTAB) State Level
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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 www.ptab.illinois.gov)
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)
Developing Tax Rates
Tentative
budget
Notice
&
Hearing
Approve
Budget
Levy
Notice
&
Hearing
Certify
Levy to
Clerk
Tax Levies (what governments spend)
Clerk
Calculates
Tax Rates
Tax Rates (where they meet):
(Billable EAV ÷ Tax Levy)
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
Individual Bill Calculation
Home Value $300,000 = $100,000 Assessed Value
Assessed Value
Less General Exemption
Less Senior Exemption
Total Billing Value
Tax Rate
Tax Bill Total
$100,000
-6,000
-5,000
=$ 89,000
X 5.5380
= $4,928.82
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
= 2.8911
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
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) 407-5500
www.DupageCo.org/CountyClerk/
Whom Should I Call?

Assessments of Individual Properties:
Your Local Assessors Office
Lisle Township Assessor
(630) 968-1183
www.lisletownshipassessor.com
Downers Grove Township Assessor
(630) 719-6600
www.dgtownship.com

Assessment Appeals or Exemptions:
DuPage County Assessment Office
(630) 407-5858
www.DupageCo.org/SOA
Whom Should I Call?

Tax Bills:
DuPage County Treasurer
(630) 407-5900
www.DupageCo.org/Treasurer
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