Should You Challenge Your Property Tax Assessment in Illinois?

Homeowners in Illinois must pay property tax each year to the local taxing authorities. The first installment is due on June 1, or the day after the date specified on your tax bill, whichever date is later. The second installment is due on September 1, or the day after the date specified on your tax bill, again, whichever is later.

Opening your tax bill can be a cause for shock, if not outrage. But by learning how property taxes are computed in Illinois, you can investigate whether the assessed value of your home is too high, and the basis of an excessive property tax bill.

This article describes the tax assessment process in Illinois. It will help you determine whether the taxable value of your home is higher than it should be. If so, we'll describe measures you can take to have that value reduced. Through this process, you might be able to knock some dollars off your property tax bill.

(For the letter of the law on this matter, see the Illinois Property Tax Code, at 35 ILCS 200.)

How Your Illinois Tax Bill Is Calculated

In Illinois, two factors determine your tax bill: first, the taxable value of your home, and second, the tax rate (that is, the percentage of the taxable value that the local tax authorities use to compute your property tax). You can learn more from the website of the Illinois Department of Revenue, which provides links to county-specific information. Below is an overview of these factors.

The process starts when a local public official determines your home's taxable value. Depending on where you live in Illinois, this official may be the county assessor, the county supervisor of assessments, or the township assessor. The term "assessor" in this article will cover all of these officials.

Each Illinois county has a slightly different calculation. In most counties, the taxable value of a home is 33-1/3% of the home's "fair cash value." The fair cash value is basically the amount for which the home would sell on the open market. In Cook County (Chicago), for example, the percentage (in the case of residential property) is 10% of the fair cash value. The percentage figures are also known as the assessment ratio.

The taxing authorities multiply the taxable value of your home by the tax rate to arrive at the tax you'll owe. Let's say the taxable value of your home is $300,000 and the tax rate is $10 for every $1,000 of taxable value. Your property tax for the year will be $3,000 (300 x $10 = $3,000).

Local officials set the tax rate, so the rate varies depending on where you live. You cannot do much about the tax rate except to vote wisely for the elected officials who determine it, and carefully consider revenue issues that appear on the ballot.

But the story is different for the taxable-value factor. Here, you have more leverage. If the taxable value assigned to your home is too high, you may be able to get it reduced, and save a bundle in property tax as a result.

Let's say, for example, that Larry and Joan own a home in Illinois. The tax assessor has placed a taxable value of $400,000 on the property. The local tax rate is $10 for every $1,000 of taxable value. This means that their annual property tax is $4,000. After researching recent sales of comparable homes, Larry and Joan conclude that the taxable value of theirs should be $350,000. They successfully appeal their assessment. Now, their tax bill is only $3,500 a year instead of $4,000.

Contact information for your tax assessor can be found on the State of Illinois Illinois Property Tax Appeal Board website.

How to Check the Official Tax Record for Your Illinois Home

The tax record for your home may contain inaccurate or incomplete information that leads the tax assessor to place too high a value on it. You can get of a copy of the tax record at the assessor's office. To locate it, call city hall, or look online at the State of Illinois' Department of Revenue website discussing property taxes, mentioned above. Some counties make assessment records available online.

Review the tax record for errors. Among other things, check the following:

• Is your home correctly classified as residential property?
• Is the size of your home and the lot it sits on correctly stated?
• Does the record accurately list the number of bedrooms and bathrooms?
• Does the record list improvements that were not actually made?
• Are defects in your home, such as a leaky basement or an aging roof, mentioned?
• Is the age of your home accurately stated?
• Is the purchase price accurate?
• Does the record give you the benefit of all the tax breaks that you may qualify for, such as those that might apply based on your income, age, disability, or military service?

If you spot incorrect or incomplete information, let the tax authorities know. That way, the record can be corrected and the taxable value adjusted.

But even if the tax record is accurate, you may disagree with the tax assessor's conclusion regarding the market value of your home. In that case, you will need to do more.

Look Into Whether Your Home Has Been Fairly Valued

Two types of information can help you establish that the assessor has placed too high a taxable value on your home. The first (and most important) is how the assessor has treated homes similar to yours. The second is how much homes like yours are currently selling for.

Taxable Values of Similar Homes

Review the assessment records for homes in your community that resemble your own. You will find those records at the assessor's office.

Finding comparable homes will take time and effort, but can be worth it if you believe that your home is truly over-valued. Try to find homes that have approximately the same square footage as yours and are located in the same neighborhood or a nearby one. If similar homes have a taxable value lower than yours, this is strong evidence that you're over-assessed.

Consider this example. Todd and Liz own a three-bedroom ranch-style home in a subdivision with many homes like theirs. The taxable value of their home is $375,000. They believe this amount is too high. They check the records for a dozen similar homes in their subdivision and discover that the average taxable value of those homes is $340,000. What's more, most of the other homes have finished basements, while Todd and Liz's doesn't. Todd and Liz have good evidence for claiming that the taxable value of their home is too high.

Sale Prices of Similar Homes

If you bought your house recently, the price you paid is excellent evidence of its current value. Regardless of when you bought your home, you should gather information about recent sales prices of similar homes in your community. Finding these sales prices may take some doing. For advice on gathering this kind of evidence, see Listing Your House: What List Price Should You Set?

Some online resources such as Zillow can be useful, though bear in mind that the evaluations found on such websites are generated by a computer, which has obviously never visited the home.

Try to avoid transactions in which the buyer has purchased a home from a relative, or at a foreclosure or property tax sale. The sales prices in such transactions may be artificially low and won't be convincing evidence of true market value.

Also consider asking an experienced real estate broker to give you information about recent home sales in your area, based on data found within the Multiple Listing Service. You may need to pay a modest fee for such assistance.

If the stakes are high, you can hire a private appraiser to provide a written report, though this will be more expensive. A local lender or real estate broker may be able to recommend a qualified appraiser. If not, check out the Appraisal Institute website for referral.

Tip: If you recently refinanced your home or took out a home equity loan, the lender probably ordered a professional appraisal. Get a copy of it. It may give you ammunition in your quest for a reduced taxable value.

Challenging the Taxable Value of Your Home in Illinois

To successfully challenge the taxable value, you'll need to establish at least one of the following facts:

• The tax assessor relied on information that is incorrect or incomplete. For example, the assessor may have assumed that your home contains 2,250 square feet of space when it actually has only 1,750 square feet.
• The assessor set the taxable value of your home that is higher than the taxable values of similar homes in your community.
• The assessor assumed that the current market value of your home is higher than it actually is.

If you're convinced that any of these facts is true, consider the following strategy for trying to get your taxable value reduced.

Confer With the Illinois Tax Assessor

If you have convincing evidence that the assessor has overvalued your home, the assessor may agree to change the value. If that happens, you won't need to pursue an administrative appeal. You can get contact information for the tax assessor or assessors in your county at the Illinois Property Tax Appeal Board website.

Most assessors are hard-working officials who take pride in their work, and do their best to treat homeowners fairly. It's best to phone ahead for an appointment with the tax appraiser or an assistant. Before your meeting, make extra copies of your evidence, such as tax appraiser reports, related to the value of your home. When you meet, assume that the assessor is acting in good faith and is willing to consider your evidence. There's no need to be argumentative or to complain about how property taxes have become burdensome. Just stick to evidence that warrants a lower taxable value for your home.

The assessor may change the taxable value on the spot but, more likely, will need a few days or weeks to look into the issue.

Pursue An Appeal of the Valuation of Your Home in Illinois

If you can't reach agreement with the assessor, you can appeal the valuation. Here's where to appeal and useful evidence for doing so.

Where to Appeal

You can appeal your home valuation by completing the Residential Appeal Form, which you'll find the website of the Illinois Property Tax Appeal Board. Click on the "Getting Started" link, and scroll down to the bottom where you can access the form. File the completed form with the county board of review within 30 days after the assessment amount is established. The tax assessor's office can give you details on what additional paperwork you may need to submit and the deadline for such submissions. There will be a hearing where your evidence will be considered.

Useful Evidence for Your Property Tax Appeal

In pursuing your appeal, several types of evidence might be useful, including:

• a recent appraisal of your home
• a contractor's report showing repair work needed on your home and how much the work will cost
• documents showing actual sales prices in your neighborhood, and
• photographs of homes similar to yours, together with a list of their sales prices or taxable values.

At the hearing, you'll probably have just five or ten minutes to present your case, so be succinct. Bring extra copies of your documentary evidence so that each hearing officer has a copy. Try to include a chart showing comparative sales prices and taxable values. You might want to arrive early so that you observe and learn from other people's hearings.

Consider Asking for a Further Review

If you don't agree with the decision of the county appeal board, you have two options for a further review. One option is to appeal in writing to the state's Property Tax Appeal Board. The other option is to go to court, in which event you'll probably need to hire a lawyer to advise or represent you.

Learn More About Property Taxes in Illinois

Check out The Illinois Property Tax System, a detailed guide to local property taxes in the state, published by the Illinois Department of Revenue. This document provides a helpful summary of the state's property tax statutes (available at 35 ILCS 200).