North, northwest suburbs get tax reliefReassessment cap goes beyond city
Thursday, September 22, 2005
by Mickey Ciokajlo
When Cook County property tax bills reach mailboxes next week, homeowners in the northern and northwestern suburbs will see the first effects of property tax relief granted to Chicagoans last year.
The majority of homeowners in those suburbs will see lower bills, but the impact of the tax break won't be as large, particularly in suburbs with higher property values and fewer commercial parcels to soak up the tax shift.
"I don't think there are going to be celebrations," said Kathy Almond, a North Shore Realtor and the assessor in New Trier Township. "This was not intended to make the people on the North Shore happy campers."
Taxpayers will soon see the impact of the 7 percent assessment cap, now that Cook County Clerk David Orr's office has released the tax rates for more than 1,200 schools, municipalities and other local taxing bodies.
The rates released Wednesday are the final piece in the complex puzzle that determine each taxpayer's bill--from homeowners in Barrington and Blue Island to the Sears Tower downtown.
The tax rates can be viewed on the clerk's Web site at www.cookctyclerk.com and clicking on "2004 Cook County Tax Rates Released." (In Cook County, real-estate taxes are paid one year in arrears). County Treasurer Maria Pappas' office will be sending out the second-installment bills late next week with a due date of Nov. 1. The first installment--simply half of last year's amount due--was owed in March.
Taxpayers in the northern and northwestern suburbs will see the biggest changes in their tax rates because those properties were reassessed last year.
For residential properties, assessment increases ranged from 27.56 percent in Elk Grove Township to 36.62 percent in Niles Township, according to Cook County Assessor James Houlihan's office.
Tax bills, however, won't climb at anywhere near that pace, primarily for two reasons.
One, as a result of rising land values, the tax rates used to calculate the bills in those communities dropped.
Two, for homestead-eligible residential properties, which far exceed ineligible parcels in many suburbs, the 7 percent cap kicks in this year.
The cap limits the growth in a property's taxable assessed value by increasing the homestead exemption. The exemption will be automatically calculated for each property to keep the taxable assessed value from rising more than 7 percent.
However, the savings in assessed value is limited to $20,000, the maximum homestead exemption. In this way, the assessed value of expensive homes with large assessment increases will rise more than 7 percent.
The law was geared toward Chicago homeowners who reacted strongly in 2003 when their properties were last reassessed, and it took effect in time for their new tax bills last year.
Almond said that the $20,000 limit on the homestead exemption prevents the cap from having much impact on homeowners in expensive houses, which with today's real-estate market are becoming more common.
Nevertheless, the law is better than no tax relief at all, she said.
"Love it. Happy to have it," Almond said.
According to preliminary estimates from Houilihan's office, two out of three homeowners in the northern and northwestern suburbs will see their tax bills drop this year as a result of the cap.
Those bills will likely creep up next year as another 7 percent of taxable assessed value is added. The purpose of the law was to spread out the pain of a reassessment so homeowners would not be socked with the entire increase in one year.
Chicago homeowners are an example of that. They were the first to experience the law a year ago, and four out of five homeowners' bills dropped from the prior year.
This year, many of those bills will rise by anywhere from 2 to 5 percent, depending on the value of the property.
The city's general tax rate dropped, to just over 6.273 percent, down from 6.433 percent last year.
The state has set the multiplier--another ingredient in the complicated tax bill calculation--at 2.5757, which is an increase over last year.
Also new this year is an increase in the minimum homeowners' exemption to $5,000, up from $4,500. The added exemption for seniors has been increased to $3,000 from $2,500.
Properties in Cook County are reassessed on a rotating basis every three years with the impact calculated into the following year's tax bill.
The northern and northwestern suburbs were reassessed a year ago, and those new property values will be reflected on the tax bills coming out next week.
The county's southern and western suburbs were reassessed this year and the city of Chicago will be reassessed in 2006.
For the northern suburbs, the 7 percent cap law for many will translate into receiving homestead exemptions much greater than the minimum of $5,000.
In Evanston, for example, 60 percent of homeowners eligible for the homestead exemption will see it limited to $20,000. Those homeowners will still get tax relief, but they won't get a true 7 percent cap.
When tax bills arrive, the assessor's office will post a calculator online that shows homeowners in Chicago and the north suburbs how the new law impacts their individual tax bill.
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Tax man cometh
Second-installment tax bills in Cook County will be mailed out late next week, with a due date of Nov. 1.
With a new state law approved last year that caps annual increases in assessed value, the calculation to figure out a homeowner's tax bill is now more complicated and depends on where one lives.
When bills arrive, Cook County Assessor James Houlihan's Web site will contain an updated calculator to help taxpayers understand their bill. The site can be found at www.cookcountyassessor.com.