Monday, March 02, 2009

IS THE REAL ESTATE TAX ON YOUR HOME SKYROCKETING WHILE VALUES FALL?

As if Chicago homeowners didn’t have enough to worry about amid the deepest housing recession in nearly 30 years, hundreds of thousands of property owners are scheduled for real estate tax assessment this summer as part Cook County’s triennial reassessment.

“Even though most home resale values generally are lower because of the recession and the home-foreclosure crisis, homeowners may be hit with assessment increases with the 2009 reassessment in Chicago,” noted Michael Griffin, a real estate tax appeal attorney. “The lucky ones will see their assessments staying flat.”

The assessor’s office reassesses the value of each of the 1.5 million parcels of property in Cook County every three years through a “mass appraisal system,” which compares each property to similar properties in a given area.

The reassessment is done on a rotating basis among three regions of Cook County—north suburbs, south suburbs, and the city of Chicago. This year, it’s the city’s turn.

Any 2009 reassessment hike issued by the assessor this summer will not be reflected on the property owners tax bill until the 2009 second installment, which will be payable in August or September of 2010.

Increased real estate tax reassessment generally means higher property taxes, but the relationship, or ratio, is not one to one. An assessment increase does not equal the same percentage increase in taxes, experts say.

Chicago and Cook County homeowners who have been battered with skyrocketing real estate tax bills in recent years are saying: “I’m mad as hell and I won’t take it any more,” as actor Peter Finch famously said in the 1976 movie, “Network.”

Cook County Assessor James Houlihan said he is eager to make assessment “factor adjustments,” based on the consumer price index and other real estate indicators. However, such a move may require an additional appropriation from the Cook County Board or approval from the Illinois General Assembly.

Chicago-area real estate appraisers and some Realtors are estimating actual depreciation of real estate values to pre-2000 levels—a decrease in value of nearly 50 percent by some estimates.

Meanwhile, “Ma and Pa” owners of smaller apartment properties have been hammered with higher taxes, experts say. Here are some examples:

• Old Town. The real estate tax bill for a 3-flat was $16,400 in 2007. The owner just received a first installment bill for 2008 of $8,232 due March 3rd. The 2002 tax bill for property was $12,200. That’s nearly a 35 percent increase in taxes over six years.

• East Logan Square. The tax bill for a 4-flat gray stone shot up more than 30 percent to $7,575 in 2007 from $5,800 in 2002. The owners recently received a 2008 first installment bill of $4,150.

• North Lincoln Square. The tax bill on this yellow brick 5-unit jumped nearly 27 percent to $6,800 in 2007 from $5,368 in 2003. The owner just received a 2008 first installment bill of $3,400.

So what’s a hapless property owner to do to put a leash on these runaway real estate assessment and tax hikes?

The first step in ascertaining whether or not your property is over assessed is checking the assessed valuation of properties similar to your own in your neighborhood. Visit the assessor’s website: www.cookcountyassessor.com, or call 312-443-7550.

If you feel you have grounds for a reduction, file an appeal online appeal at the assessor’s website. Or, call Michael Griffin, a professional tax assessment lawyer, at 312-943-1789. Griffin says there are three key grounds for an assessment reduction:

• Assessor’s error. If you can prove the assessor made an error in the description of your property, you can win a reduction. However, the error must have an impact on the estimated market value of your home.

• A uniformity complaint. This means your home’s assessment is not in line with the assessed valuation of other similar houses in your neighborhood. A homeowner should find at least three examples of similar homes with lower assessments than theirs.

• Evaluations approach. Homeowners must file a complaint and submit recent closing statement for your home or purchase prices of homes similar to yours to show that the assessed value is greater than 10 percent of the purchase price.

If an initial appeal doesn’t lower the assessed value, there are three other appeal options: the Taxpayer Advocate in the assessor’s office, the Cook County Board of Review (312-603-5542), and the Property Tax Appeals Board (217-785-6076).

Griffin advises homeowners in recently assessed neighborhoods to carefully look at the assessor’s estimate of your property’s market value. “Ask yourself, ‘Is it fair?’” Griffin said.