Property tax calculations can seem convoluted, but our friend, the Government, isn't doing it on purpose... it's just that they don't want it to be too easy for us to appeal the tax bill. They're like an older sibling that's teaching you a lesson the hard way by NOT letting you win. How are you supposed to learn if they let you win? How else is the government going to make money if everyone can understand and appeal their tax bill so easily? K, I'm done with the rhetorical sarcastic questions. Sorry. All joking aside, you should know how to understand your tax bill. For this post, which isn't very long, we'll look at Lake County and Cook County. Then we'll look at whether or not you should appeal your tax bill.
Both counties use an Assessed Value to start their math. This assessed value is NOT necessarily market value; in fact, while you want your market value to be high, you don't want the same for your assessed value. Let's use an example to help you understand the math (don't be scared). We'll start with the basic breakdown for both, then we'll get into some additional details. For the example we'll use an Assessed Value of $100,000.
100,000 divided by 3, multiplied by the village tax rate.
100,000 divided by 10 (10%), multiplied by the state multiplier (2.6685), multiplied by the village tax rate.
Each village has a different rate. See my Property Tax Chart here (it's at the bottom of the post). In the below example we're using Glenview's tax rate at 8.924% and Libertyville's tax rate of 8.13% for Cook and Lake County respectively.
Libertyville (Lake County)
(100,000/3)*.0867 = $2,890
Glenview (Cook County)
Now the extra details... some that matter and some that don't.
If you live in the home, you get a homestead exemption on your taxes. In Cook County this takes $7000 off the value just before it's multiplied by the tax rate. Lake County is the same, but they give you $6000 off the final number before multiplying by the tax rate.
Furthermore, if you're a senior citizen, you can get a Senior Exemption worth $6000 in Cook County and $5000 in Lake. This is in addition to the Homestead Exemption and applied in the same part of the equation, just before the rate is multiplied.
The Homestead and Senior Exemptions are a fixed number no matter how expensive your property. This means that whether your tax bill is like the one above for your $100,000 home, or whether it's 10x the amount for your $1M property, you're still only getting a few hundred dollars off the bill regardless.
Also, some pointless information that you'll find......pointless. Lake county does 2 things in 3rds. The first is dividing your assessed value by 3. The second is dividing that number into 3rds and dictating 1/3rd of it to land, and 2/3rds of it to improvement (building). You're welcome.
To Appeal or Not to Appeal
Contesting your taxes can save you money on your tax bill, sometimes a significant amount. This means lowering the assessed value of the home. Either homes are selling for more than your assessed value, or less. When the market is going down and homes are depreciating, that most likely means that homes are over assessed; they are worth less than their assessed value. That is the type of market that is best for homeowners to save money on their taxes. Unfortunately the market seems to be on the rise. It's possible that some homes are still not selling for as much as the assessed value, but most homes now are under assessed; they are worth more than the assessed value, and therefore tax bills are likely to increase in the future.
Thanks for reading!
Comments and questions welcome!