There are few ways on lowering property taxes in Cook County
I will not dive into the subject of what the county taxes are for and who uses taxpayers dollars to get rich. I am here to jump to the subject of “How do you lower Cook County property taxes“.
Since the market value is a very subjective and Overevaluation is costly and pretty hard-to-prove subject let’s concentrate on the Lack of Uniformity way. What it is and how it works.
First we have to understand how your tax bill is calculated (yes, some math skills required)
Say you have a masonry, 50-year old house of 1000 sq.ft. sitting on 2,000 sq.ft of land. County values your house in, say, $100,000. (let’s keep it simple with the numbers, shall we?) They call this number “Estimated 201x Market Value”.
How do they come up with this “Estimated 201x Market Value”. If you just recently purchased the house or had an appraisal on it, great. They take this number and use it. Normally this number would be a round number. Like 110000 or 465,000. For all the rest of homeowners they take a mass appraisal process. Imagine a big red button, the press it, a computer multiplies values of all the houses by a multiplier a County creates out of thin air (well, sorta) and voila, you get a number of 103,374 (or similar). And this is the number they base your county property taxes on.
Let’s go on with an example above. Estimated Market Value (or “Assessor’s Fair Market Value”) is 100K. They divide it by 10 (or multiply by 0.10 which is called “Assessment Percentage”) and come up with Estimated Assessed Value (EAV).
This is how County calculates your taxes: they take “Building Assessed Value” and multiply it by an Equalization Factor of 2.9706 (for year 2011, or 3.3 for 2010). Now we have a number of 29,706 which is called EAV before exemption.
If you have filed for Homeowners exemption or senior exemption, now is the time to deduct the value of this exemption. Say they cut you slack by some number they see fit as a reward for living in the house and caring for the neighborhood and it is 9K (Minimum exemption amount is $6,000; the 2011 range for a typical City of Chicago homeowner is $6,000 to $12,000.) So now we end up with a number of $29,706 – $9,000 = $20,706.
Now, if you a senior, we can surely deduct some other random number from our 20,706 total, but for the sake of sanity (in this example), I will try to keep this example simple. But generally, this is where you’d deduct a senior exemption number.
Let’s assume you are a home owner of the house in question and live. We will take EAV after exemptions $20,706 and now it gets more fun. Suburbs and the City of Chicago have different Tax rates. Normally City needs less money than suburbs (can you imagine? :)) But let’s say you are in Chicago, home of Picasso statue, Sears tower, two busy airports and famous Limousine of Chicago service. Who cares about the last one, right?
So, you are in Chicago. General city Tax rate is 5.455% (at the time of writing). and we have the after exemptions number of $20,706. Now is the culmination moment of putting them together. $20,706 * 5.455% = $1129.51. Ta-da! We know how much the tax bill is.
To sum up blabbering above, you have a house that County values $100,000 and due to some multipliers that County makes up without your help, they tax you at $1129.51 in our example.
By now, you expected to know where to find a blue button (red one is at President’s office, Staples store, in Cook County Assessor’s office, remember?). This blue button, after pressing it should have cut your taxes in half and you would live happily ever after praising the day you found this site. Well, hold on, tigers, there’s more coming in the next article. I wish the tax code was that simple and everything about property taxes. Go get some coffee for now, please.
When you return, proceed to reading about how to lower your taxes using Lack of Uniformity property tax appeal