Illinois Property Taxes

Real estate appraisals and valuations are foundational to the property tax assessment process. They ensure that property owners pay taxes that are commensurate with the value of their property, and they provide a mechanism for addressing discrepancies or changes in property value over time. Here's how they impact property tax assessments:

• Basis for Taxation: Property taxes are typically based on the assessed value of a property. Local tax authorities rely on appraisals to determine this value. The higher the appraised value, the higher the property tax will be, and vice versa.

• Frequency of Reappraisal: Some jurisdictions conduct property reappraisals periodically (e.g., every three or five years) to ensure that property tax assessments reflect current market conditions. If property values have increased in the area since the last appraisal, this could result in higher property taxes.

• Fair Market Value: Appraisals aim to determine the fair market value of a property, which is the price at which a property would sell under normal conditions. This value serves as the basis for property tax assessments in many jurisdictions.

• Appeals and Disputes: If a property owner believes that their property has been overvalued by the tax assessor, they can appeal the assessment. In such cases, an independent appraisal can provide evidence to support the property owner's claim. If the appeal is successful, it can lead to a reduction in property taxes.

• Improvements and Renovations: Significant improvements or renovations to a property can increase its value. If these changes are reported or detected by the tax authority, it could trigger a new appraisal. As a result, the property tax assessment may increase to reflect the property's higher value.

• Inconsistencies in Appraisals: Not all appraisals are created equal. Different appraisers might arrive at slightly different valuations for the same property due to varying methodologies, perspectives, or market data. This can lead to inconsistencies in property tax assessments, especially if different properties in the same area are appraised by different individuals or firms.

• Economic Factors: External economic factors, such as a recession or a booming real estate market, can influence property values. Appraisals take these factors into account, which can subsequently impact property tax assessments.

• Special Assessments: In some cases, special assessments may be levied on properties that benefit from certain public improvements, such as new roads or sewer systems. While these are separate from regular property tax assessments, they are still based on property valuations.

• Exemptions and Abatements: Some jurisdictions offer tax exemptions or abatements for certain types of properties or for specific groups of property owners (e.g., senior citizens, veterans). The value determined by the appraisal can impact eligibility and the extent of these benefits.

**2025 Real Estate Valuation Reforms**

Significant reforms may be coming to Illinois in 2025 or 2026 as a result of mandated reporting in 2024 by the Illinois Real Estate Valuation Task Force, which was established by Public Act 102-934. In summary, the task force is tasked with (i) reviewing historical and ongoing disparities in real estate valuations, especially those rooted in racial and ethnic biases, and (ii) providing recommendations by January 1, 2025 to harmonize valuation standards, address disparities, and ensure fairness in the real estate appraisal process in Illinois.

Property tax exemptions play a significant role in the calculation of property tax assessments. In summary, property tax exemptions provide relief to eligible property owners by reducing their property's taxable value. While they can significantly reduce a property owner's tax liability, they also impact the revenue collected by local governments, which can have broader implications for the community's budget and services. Here's how they impact the process:

• Reduction in Assessed Value: A property tax exemption effectively reduces the assessed value of a property. When an exemption is applied, it lowers the taxable value of the property, which in turn reduces the amount of property tax owed by the property owner.

• Types of Exemptions: There are various types of property tax exemptions, each designed to provide tax relief to specific groups of property owners or for specific types of properties. Common exemptions include homestead exemptions, senior citizen exemptions, veterans' exemptions, and exemptions for persons with disabilities, among others.

• Caps and Limits: Some exemptions have caps or limits whereby the exemption might reduce the taxable value of a property up to a certain amount. Anything above that amount would be taxed at the regular rate.

• Special Exemptions: Some exemptions are designed for specific purposes, such as agricultural or conservation exemptions. These exemptions might reduce taxes for properties used for farming or properties that meet certain environmental conservation criteria.

• Application and Renewal: Property owners typically need to apply for exemptions. Some exemptions, once granted, are automatically renewed each year, while others require annual reapplication. Failure to apply or reapply can result in the loss of the exemption.

• Impact on Revenue for Local Governments: Exemptions reduce the taxable base of a community. While they provide relief to property owners, they also mean that local governments collect less in property taxes. To compensate, some local governments might increase the tax rate, which could impact properties that don't qualify for exemptions.

• Appeals and Disputes: If a property owner believes they've been wrongly denied an exemption or if there's an error in the application of an exemption, they typically have the right to appeal the decision. The appeals process varies by jurisdiction but often involves submitting documentation and possibly attending a hearing.

In Illinois, the county assessor (often referred to as the township assessor in some counties) plays a pivotal role in the process of real estate valuations and property tax assessments. They ensure properties are fairly and accurately assessed, administer tax exemptions, handle appeals, and maintain transparency through public records, which directly impacts the amount of property tax that homeowners and businesses pay each year. Here's a breakdown of their role:

Property Valuation

• • The primary responsibility of the county assessor is to determine the fair market value of properties within their jurisdiction. This valuation is based on various factors, including the property's size, location, quality, condition, and recent sales of comparable properties.

  • The assessor uses a combination of methods, such as the sales comparison approach, the cost approach, and the income approach, to arrive at a property's value.

Annual Assessments

• • In Illinois, properties are reassessed every year. However, a full, on-site reassessment typically occurs every four years, known as the "general assessment" year. In between these general assessments, the assessor may adjust property values based on market trends and other factors.

Property Tax Calculation

• • While the assessor determines the value of the property, they do not set the tax rate. Instead, they provide the assessed value to the county clerk, who then calculates the property tax based on levies set by various taxing bodies (e.g., school districts, municipalities, and special districts).

  • The assessor's valuation is crucial because the property tax amount is a percentage of the property's assessed value.

Exemptions and Reductions

• • The county assessor's office is also responsible for administering various property tax exemptions and reductions available to eligible property owners. These might include homestead exemptions, senior citizen exemptions, and exemptions for veterans or persons with disabilities.

  • Property owners must often apply for these exemptions through the assessor's office.

Appeals and Reviews

• • If property owners disagree with the assessed value of their property, they have the right to appeal the assessment. The initial appeal is typically filed with the county assessor's office.

  • The assessor reviews the appeal, and if they agree with the property owner's argument, they can adjust the assessment. If not, the property owner can escalate the appeal to the county's board of review or another higher authority.

Public Records and Transparency

• • The assessor's office maintains public records of property assessments, which are available for review by property owners and the general public. This ensures transparency in the assessment process.

  • They also provide information and resources to help property owners understand the assessment process, their property's value, and any available exemptions or reductions.

Collaboration with Other Entities

• • The assessor collaborates with other county departments, such as the county clerk and treasurer, to ensure the smooth functioning of the property tax system.

  • They also work with local municipalities, school districts, and other taxing bodies to gather data and insights that can influence property assessments.