Last week, Oak Park property owners received reassessment notices from the Cook County Assessor’s Office reflecting the Assessor’s estimate of the value of their properties as of Jan. 1, 2020. The median assessed value for Oak Park homes and condominiums have increased by 19%, but assessment increases for business properties are considerably higher.
With residential assessed values increasing by 19%, one might conclude that the sale prices of Oak Park homes have increased by 19% since the last reassessment three years ago. In fact, however, the median sale price of local homes is virtually unchanged compared to 2017.
Here are some answers to at least some of your questions.
If home prices have been flat for the last three years, why are assessed values up by 19%?
A: There are many reasons for the disparity between the increases in assessed values and sale prices. One reason is that high levels of local taxation have led many residents to file appeals in recent years, which has brought some assessed values below the market. Another reason is that the county assessor’s office is using different methods to estimate property values in the 2020 reassessment compared to 2017.
If my assessed value increased by 19%, will my taxes increase by 19%?
A: No. Property taxes are primarily driven by the tax levies of local governments, and state law makes a 19% levy increase by next year virtually impossible. But reassessment can cause taxes on some properties to go up by more than the increase in tax levies.
Why did the value of business properties increase by so much more than residential properties?
A: The Cook County Assessor’s Office has made major changes in the way it assesses business properties, resulting in proposed assessed values for businesses that are significantly higher than before. In prior reassessments, however, the appeals process has substantially reduced the proposed increases for businesses, and this may happen again this year.
When will the new assessed values impact property tax bills?
A: The impact of the new 2020 assessed values will not appear on tax bills until the summer of 2021.
Can I appeal the assessed value proposed by the Cook County Assessor’s Office?
A: Yes. Taxpayers can appeal their new assessed values with the county assessor’s office through April 7. In addition, the Cook County Board of Review will be accepting appeals from Oak Park property owners at some time in the summer.
The Township Assessor’s Office can help property owners prepare and file appeals. During the appeal period, Oak Park property owners seeking help with appeals should call the Township at 708-383-8005 to set up an appointment.
What is an assessment appeal, and what is the basis for filing one?
A: An assessment appeal seeks to reduce a property’s assessed value by claiming that its assessment is unfair or inaccurate. There are three basic grounds for filing an appeal:
1. Lack of uniformity. Similar properties should be assessed similarly. To substantiate an appeal based on lack of uniformity, it is necessary to find properties comparable to yours that have lower assessed valuations. The Township Assessor’s Office can help you find comparable properties quickly and easily.
2. Errors in property characteristics. Every residential property has a set of characteristics which determine its assessed value. Errors in characteristics can be appealed. The type of error most likely to result in an assessment reduction is one that overstates the interior square footage of your property.
3. Recent purchase or appraisal. If the property value set by the Cook County Assessor is higher than a recent purchase price or recent appraisal for your property, an appeal may be successful.
Filled with figures, formulas and factors, the property tax system can be very confusing. But at its core, this complex system has just two components. The first is the combined tax levy of all local governments serving Oak Park (total tax burden), which typically rises each year. The other component is each property’s share of the total tax burden, which is adjusted at each reassessment. When the 2020 reassessment impacts tax bills in 2021, the bills will reflect an increased total tax burden as well as shifts in each property’s share of the tax burden.
Oak Park’s total tax burden
Oak Park’s tax burden consists of the tax levies set by Oak Park schools, village government, and other local taxing districts. The local tax burden totaled about $202 million last year.
The total tax burden is a key number in determining how much you pay in taxes, but it has nothing to do with reassessment. If Oak Park’s tax burden were $101 million instead of $202 million, every property owner’s tax bill would be cut in half, regardless of the decisions of the county assessor’s office.
But Oak Park’s tax burden is not likely to decline, as local taxes pay for services the community supports. Indeed, it is more likely that the burden will increase.
Tax increases, however, are limited by inflation. If inflation is 2% per year, governments can usually raise their levies by only 2%. This would correspond to a tax increase of about 2% for each property if there were no reassessment.
Your share of the tax burden
Every property pays a small portion of Oak Park’s total tax burden. For example, a property valued at 1% of Oak Park’s total assessed value will pay 1% of the total tax burden.
Because real estate values change over time, reassessments adjust assessed values to reflect the current market. If a reassessment leads to a change in an individual property’s share of the tax burden, there will be a corresponding change in its tax bill.
The key to determining whether there has been a change in your property’s share of the tax burden lies in comparing the percent increase in your property’s assessment to the increase in the overall assessed valuation of all Oak Park properties.
If the overall increase in Oak Park assessed values is 15% after adjusting for appeals, properties with assessment increases above 15% would pay a greater share of the tax burden. Properties with assessment changes below 15% would pay a smaller share.