4-Sep-15 – Tens of thousands of shocked Chicago home and apartment owners are reeling from sharply higher 2015 property tax assessments they’ve received in recent weeks from Cook County Assessor Joseph Berrios.

Experts say the assessment increases likely will mean hefty real estate tax hikes next year and landlords will be forced to raise rents to cover the expense.

In 2015, the entire City of Chicago was reassessed. For many of the properties the assessments have large increases ranging from 30 to 55 percent, according to a spot survey.

“If the 33 percent assessment increase we received translates into a 33 percent tax hike, we will need to bump our rents more than $2,000 a year,” said the owner of a Logan Square four-flat. “That means a $75-a-month increase on a typical three-bedroom apartment.”

Mayor Rahm Emanuel says the city needs to raise hundreds of millions of dollars in new revenue to pay for pensions of teachers, police officers, and firefighters. However, crystal ball gazing into the outlook for the expected property tax hike forecast for 2016 is cloudy, experts say.

“The property tax bill is determined by four factors – the assessment, the equalization factor or ‘multiplier,’ the tax rate, and the exemptions,” said Michael Griffin, a Chicago real estate tax appeal attorney. “In a triennial tax assessment year, homeowners should appeal their assessment because they are likely to see a new, higher assessment.”

Homeowners also should review their exemptions because they can reduce their tax bill if they have the proper exemptions, Griffin noted.

Real estate taxes are expected to rise when paid in 2016. However, predicting a hefty property tax increase next year really centers on the wild cards – the tax rate and the state equalization factor. Taxpayers can’t challenge the multiplier or the tax rate.

‘Multiplier’ compensates statewide for high county assessments

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 value is determined by the Illinois Department of Revenue. The multiplier was pegged at 2.7253 in 2014, up from 2.6621 in 2013.

When real estate values sank in 2008 during the Great Recession, the multiplier skyrocketed to 2.9786 and then peaked at 3.3701 in 2009. It hovered at a lofty 3.3 in 2010 before slipping to 2.8056 in 2012 as the real estate market started to recover.

The main engine that drives up property tax bills is the amount of money spent by local government. For example, homeowners who read their 2014 tax bills will see sharply increased spending for schools and community colleges.

Chicago’s 2014 tax rate declined slightly to $6.808 per $100 of assessed valuation, down from $6.832 per $100 of assessed valuation in 2013.

“While the 2014 tax rate in Chicago was lower, the increase in the state equalization factor offset the tax-rate decrease for Chicago taxpayers,” noted Griffin. “If assessments, the multiplier, and the tax rate rise in 2015, Chicago property tax bills in 2016 will be sharply higher.”

The 2015 property tax bills in Chicago will come due in August 2016, when the second installment of the 2015 tax bill arrives.

An informal survey revealed the following tax bill increases for small, “ma and pa” apartment buildings on Chicago’s North and Northwest sides…

Logan Square. The 2015 assessment on a vintage graystone four-flat catapulted 33.7 percent to $47,953. The assessor said the market value of the building jumped to $479,530 from $358,710. The 2014 tax bill on the property was $6,178, down from $6,323 in 2013, because the owner filed a tax assessment appeal and won. Next year, it is likely that the tax bill will jump substantially, forcing the owner to raise rents to cover the increase.

North Lincoln Square. The 2015 assessment on a 1920s yellow brick four-flat in the Arcadia Terrace section of the neighborhood increased 30.7 percent to $47,909. The assessor said the market value of the building jumped to $479,090 from $366,560. The 2014 tax bill on the four-flat building rose to $6,324 from $6,188.

Lake View. The 2015 assessment on a 1930s red brick 16-flat in the Roscoe Village section of the neighborhood rose 20.8 percent to $180,663 from $149,519. The 2014 tax bill on the three-story corner building rose to $27,741 from $27,193 in 2013. (Left) Unrelated home for rent in Roscoe Village in 2014.

Irving Park. The 2015 assessment on a red brick six-flat in the Old Irving Park neighborhood rose 7.7 percent to $52,467. The assessor said the market value of the building jumped to $524,670 from $473,620. The 2014 tax bill on the six-flat rose to $8,826 from $8,651 in 2013. Also, the building no longer gets city garbage pickup. The owner now must pay $125 a month for private scavenger service.

Appeal now, before next year’s bill arrives

Owners of single-family homes on the Northwest Side of Chicago also felt the sting of sharply higher property tax assessments. Here are two examples…

The 2015 assessment on a stucco home in the Villa Historic District near Addison Street and Pulaski Avenue shot up 33.9 percent to $41,413. The assessor said the market value of the home jumped to $414,130 from $309,350. The 2014 tax bill on the home rose to $5,764 from $5,650 in 2013.

On a large brick home in the Old Norwood Park enclave on the Far Northwest Side, the 2015 assessment skyrocketed a whopping 55.8 percent to $82,166. A recent sale increased the market value to $821,660 from $527,340. The 2014 tax bill on the home was $9,784 – up from $9,591 in 2013.

Experts say property owners who think they are over-assessed should appeal now before they receive next year’s tax bill. If they wait until the tax bill arrives in 2016, they say it will be too late to appeal.

Visit the assessor’s website at www.cookcountyassessor.com or call 312-443-7550 to find comparable properties or start the appeal process.

If an appeal at the assessor’s office does not lower the assessed value, there are two other appeal options – the Cook County Board of Review (312-603-5542 or www.cookcountyboardofreview.com) and the Property Tax Appeals Board (217-785-6076). Or call Michael Griffin, a tax assessment lawyer, at 312-943-1789.