As of 2018, Chicago has one of the highest tax rates in the United States. With Chicago taxes climbing, residents are looking for ways to reduce pricing whether it’s through the House Bill 4224 or filing an appeal.
Examining State and National Level
Homeowners in Chicago pay higher property taxes than 93% of the U.S. In the past thirty years, residential property taxes have risen at a rate of 3.3 times faster than the state’s median household income, reported by Illinois Policy.
Illinois’ average effective property tax rate stands at 2.32%. At this rate, Illinois Policy states that “it takes 43 years for an Illinois family to pay property taxes that are equal to the value of their home.”
Tax rates in Chicago counties are: McHenry County: 2.82%, Kane County: 2.76%, Lake County: 2.70%, Will County: 2.38%, DuPage County: 2.17%, and Cook County: 2.10%, according to Crain’s Chicago Business.
While Chicago tax rates surpass the nationwide average of 1.17%, 18 U.S. counties had tax rates over 3%. Of the counties at that rate, two of them were in Illinois: Winnebago County, at 3.19%, and Bureau County, at 3.64%.
The increases in Chicago’s property taxes has propelled the state to the second-highest in the nation. While taxes have rapidly grown, average salaries have remained relatively the same, therefore, forcing residents to move out-of-state.
The rise in property taxes can be attributed to a large labor pool that has grown in Chicago. With 36 Fortune 500 companies headquartered in the city, it has attracted many individuals for work.
Another reason that could explain why taxes are so high is because there are multiple taxing authorities in the state. There are more than 8,000 authorities that give money to city and county governments, as well as school districts.
“…It takes 43 years for an Illinois family to pay property taxes that are equal to the value of their home.”
Fire departments, libraries, and parks are only a few of several areas that benefit from property taxes. Relative to neighboring states, Illinois remains one of the highest but is still surrounded by some states with equally high tax rates, including Wisconsin with 1.95% and Michigan with 1.71%,
Even though the tax rates have skyrocketed, there are a variety of ways that residents can attempt to lower their taxes.
Chicago residents can significantly lower their taxes through House Bill 4224, which if passed, would stop Illinois’ tax rates from climbing even higher.
HB 4224 is part of Governor Bruce Rauner’s turnaround agenda and in order for the bill to work, property taxes would have to stay frozen for the next 28 years, according to Illinois Policy. Other elements of the legislation include allowing the scope of bargaining agreements to narrow and create less expensive bids for government work.
Another way to lower your property taxes is through forceful consolidation and going through the appeal process, which is designed to modify assessments when necessary. Once residents get their new assessment, based on the market value of an individual’s home, they have 30 days to file an appeal to the Cook County Assessor’s Office.
Personal property is one-tenth of the market value. For businesses, it’s one-fourth of the market value. Prior to making an appeal, researching similar homes in your area with sales that were in the same range as your own, can prove to be helpful when using that data as evidence for your argument.
Appeals are intended to reduce the Assessor’s valuation of a property. What’s important to note is that an appeal doesn’t automatically lower a future tax bill and most tax revenue goes toward public schools.
The value of a home is determined by the Assessor’s Office analysis of the previous three years of sales and marketing conditions for similar homes in the neighborhood. If you’re successful in your appeals, the lowered rate would be reflected in second-installment tax bills.