13 Oct Residential Real Estate Taxes: Paying Taxes on the Past Rather than the Future
Homeownership in Illinois comes with an often-confusing residential real estate tax. It’s important to understand how property taxes work as a homeowner. In fact, paying taxes on residential property taxes in Illinois is something that’s done based on the past rather than the future. Here we review the process, so you better understand how residential real estate taxes work.
Understanding Your Assessment
The Assessor’s office in your County uses what’s called the multiple regression technique to value your property. It provides a sales comparison average, looking at a house’s value and the value of similar neighbor’s homes. The assessor’s goal is to maintain consistency for similar homes in the area so that every similar home is assessed with the same value. Most properties have their houses assessed every three years.
However, in some cases, there might be a need for reassessment. This would be due to material changes such as a major renovation to the house, if the property is divided, or if the home is demolished. Your residential real estate tax bill is due each year in two installments.
What is an Assessment/Reassessment Notice?
Your reassessment notice includes:
- House Property Index Number (PIN)
- Characteristics of the property
- Estimated fair market value
- Assessed value
It also contains any exemptions applied to the property.
What are Exemptions?
There are many possible exemptions that can be applied to your property taxes to help lower your property tax bill. The exemptions include:
- Homeowner Exemption
- Senior Exemption
- “Senior Freeze” Exemption
- Persons with Disabilities Exemption
- Returning Veterans Exemption
- Veterans with Disabilities Exemption
- Long-Time Homeowner Exemption
- Home Improvement Exemption
You must apply for the exemptions that apply to you. Should an exemption be missed, you can apply for a refund.
Assessment Notices versus Tax Bills
A reassessment notice doesn’t require any action on the homeowner’s part. However, it gives you a chance to appeal if you believe the assessment is too high. Your reassessment affects the second installment tax bill the following year. For example, when you receive your 2020 reassessment notice, your tax bill applying it won’t be due until the summer of 2021.
What if the Information on the Assessment is Incorrect?
Because you can appeal an assessment, it’s always a good idea to take the time to review the details, including the characteristics listed for your home. You can appeal if:
- The characteristics listed are incorrect
- You believe your home has been overvalued
- You think important information about your home is inaccurate
Your appeal is filed with the County Board of Review. If your appeal is successful, your second installment tax bill the next year is adjusted.
How are Property Taxes Calculated?
Property taxes go toward local levies set by taxing bodies. Your assessed value is used to calculate how much you must pay toward those levies. Each area has its own total levies, and each residential real estate owner must make tax payments to cover those levies. In general, your taxes are calculated using the following:
- 10% of your home’s Fair Market
- 2.916% applied as the Equalized Assessed Value (EAV)
- Your tax rate – this rate varies by municipality
Any eligible exemptions are then also applied.