I know that this issue is of interest to all home owners and now, especially, as property taxes are increasing dramatically. I am writing for the benefit of my Kane County neighbors in Aurora Township, but most of the information is basic to property taxes in Illinois.
The following explanation is taken from the Quick Guide on the Kane County Assessors web page:
Kane County property owners pay property taxes which generate revenue used to operate municipalities, schools, parks, libraries, and road districts, as well as, fire and police protection.
The property tax system is based on the value of the property. It involves two separate component activities:
1. Determining the amount of taxes to operate the local units of government.
2. Apportioning that tax burden among all taxpayers.
The system provides a means of generating necessary revenue. That amount is determined by each local unit of government.
The system also places a value on property. The burden of generating the needed revenue can be spread among the parcels of property according to the proportionate value of each parcel.
Kane County is under the Property Tax Extension Limitation Law which caps increases in property tax extensions for non-home rule taxing districts. Increases in tax extensions are limited to the lesser of 5% or the Consumer Price Index (CPI) for the year preceding the levy year. This limit slows the growth of property tax revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation.
I might add here that the property taxes are determined by the spending amounts of our local taxing bodies. These local taxing bodies use property tax revenues to pay for the services rendered to the residents of their district.
Consider this equation provided by the Lisle Township Assessor:
Fair Market Value (Determined by comparing similar properties that have sold in your area.)
X Level of Assessment (Assessor is required by law to assess properties at 1/3 of their fair market value.)
____________________________________________________________
= Assessed Value
X County Equalizer (Applied if assessed values are too low.)
____________________________________________________________
= Equalized Value
- Exemptions ****
____________________________________________________________
= Billing Value
X Local Tax Rate *****
_____________________________________________________________
= Property Tax Amount
*****Exemptions reduce the Equalized Assessed Value (EAV) by a specific amount; the actual tax savings depends on the tax rate for the specific property.
- The General Homestead Exemption reduces the EAV of an owner-occupied dwelling by $5,500 in 2008/payable 2009, increasing to $6,000 in 2009/payable 2010.
- The Homestead Improvement Exemption reduces the EAV of an owner-occupied dwelling with qualifying addition by up to $25,000.
- The Senior Citizen Homestead Exemption reduces the EAV of a senior-owned-and-occupied dwelling by $4,000.
- The Senior Citizen Assessment Freeze Exemption literally freezes the EAV of senior-owned-and-occupied dwelling at a base year, causing the assessment not to increase; this is restricted to households with qualifying incomes of $55,000 or less.
- Other exemptions include:
- $5,000 for veterans returning from an armed conflict (first year only).
- Up to $5,000 for qualified disabled veterans.
- Up to $70,000 for disabled veterans who need adaptive housing.
- $2,000 for qualified disabled persons.
***** The local tax rate is determined by the combined spending of all taxing districts, including the county, the forest preserve district, townships, community colleges, schools, villages, fire districts, libraries, parks, etc. Each government prepares a budget, requests the revenues needed, and submits the request to the county clerk. The county clerk calculates the tax rate based on their requests. The local tax rate is then applied against all property assessments in the district to produce the Property Tax Amount for each property.
The tax appeal deadline for Aurora Township (my neighbors in Kane County) was December 31, 2010. So there is nothing to be done at this time but educate and prepare ourselves for when the county sends out the assessment notices in the Fall.
Determination of assessment is performed by the assessor’s office. This can be confusing to some (and to me) because we pay taxes in arrears and the assessor’s office can be done with the year’s work as early as April 2011 for the bill the taxpayer receives on April 30, 2012. During that first quarter, a sales ratio study is performed based on all sales in a subject’s subdivision for the previous year. This is where I will require clarification. I was told at a past presentation on the subject, that sales from as far back as 3 years can be used. Once I am clear on the sales which are used by the assessor, I will be better able to determine if our property tax assessments are correct.
sharonriegert
