Fighting ignorance since 1973 Its taking longer than we thought
Does 'downward reassessment' mean my
property taxes will go down?
I saw in the paper that the county is revising property assessments downward because of the drop in home values. Does this mean my property taxes are going to go down?
Smart-ass answer: Sure, right after they discover a cure for death.
Serious answer: See above.
Nuanced answer: It's not out of the question that property taxes will go down for some people maybe even for quite a few people. However, if you're the sort I think you are, you're not in that select group. On the contrary, for reasons to be explained, your taxes will almost certainly go up.
1. The "downward reassessment" you read about doesn't affect you it's only for suburbanites.
Property in Cook County gets reassessed every three years. The north suburbs weren't due to be reassessed till 2010, and the south suburbs not till 2011. Since property values all over have dropped like a rock, the assessor's office generously (well, not that generously, as we'll see) decided not to wait. It's doing blanket downward reassessments of suburban property this year, on a township basis. So far, Evanston Township assessments were knocked down 4 percent; in Cicero it was 15 percent.
Don't worry, you're not getting screwed just because you live in the city. This is Chicago's year to be reassessed on an individual-property basis. You'll get a notice later this year of your new assessment, supposedly reflecting local market conditions, which, as you know, suck.
2. Notwithstanding sucky conditions, not all city assessments will go down.
This is the first thing (of three) that could trip you up taxwise. You remember all that business about property reassessment caps during the boom years? Well, the caps are going away now. I'll skip the complicated explanation all you need to know is that, in the city of Chicago, the maximum amount subtracted from the annual increase in your equalized assessed value is as follows:
Here's why I say you, personally, are probably not going to see your tax bill go down. If you're reading this column you are, by definition, a hip, cutting-edge type of person, and you probably live in a hip, cutting-edge type of neighborhood. Since you posed this question we can also assume you own a house or condo. If so, particularly if you own a house, you got socked with huge increases in assessed valuation during the boom years, and were eligible for close to the maximum subtraction. Your property value may have gone down since then, but your subtraction is definitely going down possibly more than your equalized assessed valuation. Following me? If not, don't worry. There's worse to come.
3. Even if your assessed valuation goes down, your taxes might go up.
Here's where things start to get really confusing. All your property's assessed value does is establish your share of the county's total property tax burden. In other words, the number itself doesn't matter that much what's important is how your number compares to everyone else's numbers. If your number goes down by a tenth but everybody else's numbers go down by half, your relative share of the overall tax bill increases, so you could be on the hook for more tax. I hesitate to make sweeping generalizations, but casual observation suggests property values in more affluent areas have held up better than those in humbler parts of town. Notice, for example, that Cicero Township's values dropped 15 percent while those in Evanston dropped just 4 percent. If (a) that holds true across the board, and (b) you live in what's (now) considered a desirable area, everybody else's values may go down more than yours. So even though your value went down, your share of the collective tax bill could go up.
Wait, we're not done yet.
4. Even if you escape trap #1 (assessment cap goes away) and trap #2 (your value goes down less than everybody else's), you could still get nailed by trap #3 (the tax levy goes up).
All we've been talking about so far is your assessment your share of the total property tax bill. Figuring out that bill, formally known as the tax levy, is a completely separate process, and one that's in the hands of the taxing bodies. The board of education gets the biggest cut, but lots of other taxing bodies get their share, including city and county government. I won't predict what's going to happen; remember, although you're being reassessed this year, the levy doesn't get figured out, and the final property tax bills don't get calculated, till next year. Maybe, in this time of scary budget deficits and rising demands on government resources, our public officials will figure out miraculous ways to economize and do more with less or at least with no tax increase. Not to be cynical, but I'm seeing that happen right after the death cure.
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