By Don DeBat

9-Jul-24 – Tens of thousands of Chicago homeowners recently received some bad news in the mail – the second installment of their 2023 real estate tax bills from Cook County Treasurer Maria Pappas. The 2023 property taxes are due August 1, 2024.

For a wake-up call, analysts say you should especially eyeball the skyrocketing tax allocation for the Chicago Board of Education – politically supported heavily by Mayor Brandon Johnson. That part of your tax bill jumped up to 8 percent between 2022 and 2023. That’s the biggest bite coming out of your wallet.

“Every homeowner should review their exemptions outlined on the second installment of their real estate tax bill because they can reduce their bill by hundreds of dollars if they have the proper exemptions applied,” advised Michael Griffin (left), a Chicago real estate tax appeal attorney.

Cook County Assessor Fritz Kaegi advises homeowners to review and confirm their exemption deductions, located in the bottom left corner of the tax bill.

Most homeowners who occupy their residences are eligible for the Homeowner Exemption, which saves an average of about $700. Senior homeowners over the age of 65 are likely eligible for additional property tax savings with the Senior Exemption.

Seniors and veterans may also be eligible for further exemptions such as the Low-Income Senior Citizens Assessment Freeze (or “Senior Freeze”) and Veterans with Disabilities Exemption, according to Kaegi.

If a homeowner believes they are eligible for an exemption, they can apply for their missing property tax savings by completing a Certificate of Error (COE). This form provides homeowners with an opportunity to redeem missing exemptions for four years over the 2018 through 2023 tax years, said Kaegi (right).

Homeowners are encouraged to submit an online application immediately or make an appointment with the Assessor to apply for missing exemptions. Accepted photo IDs and documents required to apply are listed on the Assessor’s website.

That enlightening advice was followed to the letter for one senior property owner in Lincoln Park, who applied online in 2022 for a Homeowner Exemption, a Senior Exemption, and the Senior Freeze.

The property owner qualified for all three exemptions, but the result was less than satisfying. Despite providing all the necessary documentation, he struck out on all three with the online application.

Ironically, the property owner had a Homestead Exemption and Senior Exemption in 2021, but they simply disappeared from the second installment of the 2023 bill. A homeowner is not required to apply for these two exemptions every year. The owner has contacted the Assessor to investigate the computer glitch that may have caused the problem.

Here is the terse homeowner response he received via mail from the assessor:

Without exemptions, the real estate tax bill on his owner-occupied small income property jumped nearly $1,400 to a whopping $27,628. The owner also noticed that more than half of the bill was allocated for the Chicago Board of Education.

How tax exemptions work

The property tax bill is determined by four factors: the assessment, the equalization factor or ‘multiplier,’ the tax rate, and the exemptions, explained Griffin.

The Homeowner Exemption recently was increased to $10,000 from $7,000, and the Senior Exemption was hiked to $8,000 from $5,000. Those exemption amounts are deducted from the tax bill.

Also, more seniors can qualify for the Senior Freeze because the Illinois Legislature recently increased the maximum annual income to receive the freeze to less than $65,000 from less than $55,000.

Other exemptions are designated for Home Improvement, Longtime Homeowners, Persons with Disabilities, Religious Institutions, Returning Veterans, and Veterans with Disabilities.

Predicting a hefty future property tax increase really centers on two wildcards – the tax rate and the state equalization factor, which can’t be challenged by taxpayers.

The equalization factor (or “multiplier”) is established each year for Cook County to bring property tax assessments in line with other parts of Illinois. The factor is determined by the Illinois Department of Revenue.

The 2023 tax rate in Chicago rose to 6.995 percent per $100 of assessed valuation from 6.697 percent a year earlier. And the 2023 state equalization factor, designed to make assessments uniform statewide, rose to 3.0163 percent per $100 of assessed valuation from 2.9237 percent a year earlier.

The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2023 tax bills will see the continued increased spending for schools and police, firefighter, and teacher pensions.

Griffin advises that property owners who think they are over-assessed should appeal now.

Visit the Assessor’s website to find comparable properties or start the appeal process. The Assessor is now in the middle of the 2024 appeal process, following the reassessment of the entire City of Chicago.

A taxpayer can file with the Cook County Board of Review and later with the Illinois Property Tax Appeal Board, or call Michael Griffin, an expert tax assessment lawyer.