By James W. Chipman
No matter where you live or what type of property you own, you may qualify for any number of special tax incentives that could save you hundreds or even thousands of dollars.
Illinois may be second in the nation when it comes to the highest property tax burden, but the Prairie State offers its fair share of tax breaks too. Here are a few of the laws designed to help homeowners and businesses cut their taxes.
Exemptions that reduce the assessed value of your home:
- General Homestead: Taxpayers can receive a maximum exemption of $6,000 for an owner-occupied residence ($10,000 in Cook County).
- Senior Citizen: Homeowners age 65+ can receive a $5,000 exemption for an owner-occupied property ($8,000 in Cook County). An annual application is required.
- Senior Freeze: Senior citizens who live in an owner-occupied home and meet certain income levels may have their assessments frozen. An annual application is required.
- Home Improvement: Owners can make up to $75,000 worth of property improvements without an increase in taxes for at least four years from the date of completion and occupancy, or until the next reassessment, whichever is later.
- Returning Veterans: Veterans returning from active duty who own and occupy a property as their principal residence are entitled to a $5,000 exemption for two consecutive years.
Special valuation incentives for homes and businesses:
- Open Space: Land containing 10+ acres that is used exclusively for maintaining natural or scenic resources or promoting conservation of natural resources for the last three years is eligible for an assessment based on “use value,” which is significantly less than market value. Public and private golf courses qualify. This law can help residential owners with large undeveloped tracts and businesses holding excess land for future expansion.
- Farmland: Land is eligible for a farmland assessment provided it meets the definition of “farm” and has been in that use for the two preceding years. This can include any property used solely for a variety of agricultural purposes with no acreage requirement. Farming must be the primary use of the land, and like open space, this assessment is based on use value.
- Solar Heating and Cooling: When a solar energy system is installed on a property, the owner may apply for an alternate assessment. The improvement is then assessed as if heated or cooled by conventional means and with the solar energy system—the alternate valuation is the lesser of these two values.
Special valuation incentives for businesses only:
- Model Home: A dwelling, condominium or townhome used as a display or demonstration model for prospective buyers is to be assessed at its value prior to construction or a zoning classification change. The home can be furnished and even used as an office. The lower assessed value remains in effect until the home is sold or leased for use other than a model home.
- Developer’s Exemption (excludes Cook County): This exemption encourages real estate development by protecting developers from paying higher taxes until a return on investment can be realized. It applies to acreage in transition from vacant land to a residential, commercial or industrial use. The tax break ends when a lot is sold or used for a business or residential purpose, or a habitable structure is built on a lot.
For more information and to determine whether your property is eligible for an exemption or incentive, contact a property tax attorney today. They’ll take you through each step required to qualify your property for these tax reducing benefits.
By James W. Chipman
As an owner, you’re entitled to your privacy. However, denying a request for an interior inspection could work against you without a property tax attorney to assist.
Township assessors will begin giving all properties in their jurisdiction a look when the 2019 reassessment period begins on January 1. State law requires property in Illinois to be reassessed once every four years, while it’s every three years in Cook County. But just how close of a look are assessors entitled to take?
Assessors often gather data from a variety of sources in order to calculate your property’s market value. If there is not enough information, or in the case of new construction, assessors may ask to inspect the interior of your property.
LET THEM IN? IT’S YOUR CALL
Deciding whether or not to allow access depends on your situation. Letting them in could seem reasonable in order for the assessor to carry out his or her duties. On the other hand, you are entitled to your privacy and might see an interior inspection as unnecessary and intrusive.
There is no law in Illinois that specifically gives assessors a right of entry into your property without permission. The courts made it clear in 1986 that interior inspections are not required for assessment purposes, stating “[t]here is a distinct and palpable difference between inspections necessary for the public’s safety and well-being and an inspection to determine real estate assessments on private property.”*
In other words, your ability to exclude others is a fundamental part of your right to the enjoyment of private property. It can only be infringed upon in very limited circumstances when the government has a legitimate concern for public safety.
DETERMINE WHAT’S BEST FOR YOU
While refusing the assessor access is within your rights, that decision requires them to make certain assumptions about your property that may not work in your favor. For example, without an inspection, the assessor may overestimate your property’s size or miss deferred maintenance issues that affect its condition. If you believe your taxes are too high, it could be because the assessor made prior incorrect assumptions about your property. You can file an appeal based on the erroneous information, but the burden of proof will be on you to show that the assessment is wrong.
Property assessments are intended to reflect market values so equity and uniformity can be maintained. While market values can change dramatically between reassessment periods, once properties are reassessed, assessments typically stay the same until the next cycle, unless there is substantial cause to change them.
If an assessor wants access to your home or business, contact a property tax attorney immediately to determine what approach is in your best interests. It could very well be a situation where your attorney can answer and address any questions or concerns about your property without an interior inspection.
*Source: County of Fulton v. Property Tax Appeal Board of the State of Illinois, #3-86-0125 (1986)
By James W. Chipman
Reviewing your property record card for errors or misjudgments could lead to a reduction in your assessment and overall tax liability.
An easy way to reduce your property’s assessment—and ultimately your tax liability—is to find and correct any inaccuracies that appear on your property record card.
The Illinois Freedom of Information Act makes property tax assessments and other public records subject to inspection and copying, with certain exceptions.* That’s just one more reason to periodically check your property record card for errors, discrepancies or outdated information.
Property record cards are kept locally by either your assessor or the county assessor. Most cards are two-sided and contain details ranging from a property’s age and size to its sales history and other data used to determine the assessment. With that much information, mistakes are bound to happen. Here’s a closer look at what you’ll find on your property record card:
- Owner’s name and address
- Legal description
- Parcel identification number (PIN)
- Sales and assessment history of the property
- Picture of improvement(s), if applicable
- Square footage of the site or land, front footage and depth or acreage
- How the land assessment was computed
Adjustments to the land may be made for factors that negatively affect its value, such as location, traffic, topography or aesthetics. Site information may include a “neighborhood” factor commonly used for calculating assessments—land assessments should be uniform for each property within the same neighborhood. Make sure the land dimensions are correct and cross check the assessor’s figures with any other property documents you have in your possession (i.e., real estate contract, deed, title or appraisal).
Finally, one often overlooked situation that can affect the value of your property is the presence of an easement, a legal right to a limited use of another's property. For instance, your neighbor may have an access easement to cross over your property to enter or exit their own property.
- Drawing of improvement(s) made by an assessor’s employee who visited your property
- Style (one-story, two-story, tri-level, etc.)
- Construction (brick, frame or stone)
- Number of baths, bedrooms and amenities, such as fireplaces, garages (one- or two-car; attached or detached) and basements (crawl, partial or full; finished or unfinished)
- Building class and condition of the improvement(s)
It is critical to review and confirm all of the above elements for veracity.
Generally, for residences, each section of a dwelling is measured from the outside dimensions. The sections separate livable areas from non-livable areas, such as garages, basements, attics, porches and patios. Check each structure’s measurements and the math done to compute a total living area or square footage. This figure plays a key role in the assessment process, as it is used to calculate a unit value or price per square foot for the improvement.
Building class and condition are judgment calls made by the assessor based on the physical age of the improvement and the rating assigned to the structure definitely impacts your assessment.
The assessor takes all of the specific information obtained about the improvement and arrives at a “cost to replace new” based on uniform cost calculations. After current cost conversion and class factors are applied, the replacement cost is then reduced by a net depreciation which determines the building value and the assessment. Cost estimates, while an acceptable approach to valuing property, often times are not representative of the marketplace, and thus, are not the preferred method of valuation.
IMPORTANCE OF ACCURACY
Inaccuracies on your property record card may be the result of a mathematical error or a degree of discretion or judgment. A significant change in any of your property’s characteristics or features will most likely result in some assessment relief.
If there is no plausible explanation for an error, a taxpayer has several remedies. Consulting a property tax attorney is the best way for determining how to resolve the issue.
*Source: 5 ILCS 140/1 through 140/11.6
By James W. Chipman
From understanding complicated laws to knowing how to dispute exorbitant assessments, having an expert on your side can ensure you’re not overpaying when it comes to property taxes.
Property taxes affect us all, whether we’re paying them directly or receiving services or benefits covered by the tax. That’s especially true in Illinois, where property taxes are the 2nd highest in the nation, behind only New Jersey.*
As the owner of a home or a business, your taxes help pay for education, public safety, infrastructure, emergency response and a variety of social services. But you don’t want to pay more than necessary, something a real estate tax attorney can ensure by considering the following factors:
1. Illinois reassessment in 2019: Township assessors are required by law to view, inspect and reassess each property in their jurisdiction once every 4 years. In Cook County, property is reassessed every 3 years. Reassessments ensure assessments are fair and equitable on a countywide basis—given there are typically more individual changes made in general assessment years, significant increases often occur.
2. Vague, complex tax laws: Frequent changes in these laws only compound the problem. Different interpretations can create legal uncertainty and possibly result in different tax consequences for property owners.
3. Differences for businesses vs. residential properties: In Cook County, businesses are assessed at 25% of market value, while single-family homes and multi-family properties are assessed at just 10%. Businesses can be singled out and experience higher tax burdens than residences.
4. Inconsistent, subjective and unknown methods of valuation: Some assessing officials use a “mass appraisal” approach in which a large number of properties are valued simultaneously using standardized procedures. However, one size does not fit all. Many properties are not typical and require special individualized attention.
5. Ability to challenge unfair and excessive assessments: Taxpayers who wish to appeal their assessments have several options. Each option, however, comes with its own set of deadlines. One common mistake many taxpayers make is to wait for the tax bill to arrive in the mail. By then, appeal periods have expired and the only recourse is to pay the tax and wait until the following year to file an appeal.
A real estate tax attorney can represent you in all stages of the property tax appeal process, from the research, preparation and filing to representation before the assessor and local and state boards. The benefits of having an expert on your side heavily outweigh the cost of service, or even worse, the potential cost of making a mistake.
Most people and many attorneys are overwhelmed by the complexity of property taxes. Hiring a real estate tax attorney is the best way to make sure you pay your fair share—and no more.
*Source: Chicago Tribune, April 5, 2018