Monday, November 09, 2009

2009 REAL ESTATE ASSESSMENTS WILL LIKELY PUSH TAXES HIGHER IN 2010

“So why did my real estate tax bill increase more than Mayor Richard M. Daley’s bill?”

That’s the question that thousands of angry property owners are asking this autumn as real estate tax bills arrived in the mail this week. And, experts say even higher assessments could be on the way as a result of the 2009 reassessment in Chicago.

“Even though most home resale values generally are lower because of the recession and the home-foreclosure crisis, some 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 or a few may receive a reduction in their assessment.”

Part of the reason assessments and taxes are on the rise is a benefit called the 7-percent homeowner exemption has been rolled back over the past few years following heavy lobbying by major commercial and industrial property owners. And, a $65-million property tax increase pushed through earlier by Mayor Daley now is showing up on tax bills. Everyone wants to blame Cook County Assessor James Houlihan for the increases, but he was just doing his job. The assessor’s office reassesses the value of each of the 1.5 million parcels of property in Cook County every three years while comparing 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 last summer and fall 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.

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. For 2009, the Assessor has changed the level of assessment with the residential assessment level changing to 10 percent from 16 percent. Assessment levels of commercial and industrial properties also were changed to 25 percent from 36 percent or 38 percent.

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.

Judy Roettig, executive director of the 300-member Chicagoland Apartment Association (CAA), reports that several North Side rental property owners recently were hammered with assessed value increases ranging from 18.6 percent to a whopping 182 percent. Dramatically higher apartment assessments could lead to higher rents in 2010, she said.

Meanwhile, some “Ma and Pa” apartment owners have been hammered with higher taxes, experts say. The owner of a six-flat in Old Town received a second-installment 2008 bill for $9,028 due December 1st. The total 2008 tax bill is $17,878, up from $15,775 in 2005. That’s a 12-percent increase in taxes over four years.

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 the Board of Review 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 a recent closing statement for your home and/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 at the Assessor’s office doesn’t lower the assessed value, there are three other appeal options: 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.