Cook County Board lowers real property assessment levels to provide relief
In these difficult economic times, the Cook County Board of Commissioners has amended the ordinance lowering the level of assessment for single-family residential properties (Class 2), as well as levels of assessment on other use properties.
For example, homes will now have assessment levels of 10 percent of the full market value, a decrease from 16 percent. The board acted with encouragement from Assessor Jim Houlihan and the other interested entities.
To better appreciate this significant revision in the assessment of Cook County homes, a basic understanding of the classification system in the Cook County Real Property Classification Ordinance is needed.
Pursuant to the Illinois Constitution, Cook County and other counties with 200,000 or more inhabitants are authorized to classify property according to its use.
With the intention of shifting the property tax burden away from the residential class and toward other classes, particularly the commercial and industrial classes, the Cook County Board passed the real property assessment classification ordinance in 1973.
The classification system specifically assesses residential property at a lower level than other properties to show its designed intent to shift the tax burden away from homeowners.
The different property classes are assessed at varying percentages of market value within the ordinance, which was applicable for 1973 and subsequent tax years, and is the only ordinance of its kind in Illinois.
Prior to adoption of the ordinance, all real property in Cook County was assessed at 33.33 percent of market value, which was the same assessment formula utilized in the rest of the state. (All counties outside of Cook continue to assess real property at one-third of market value.)
The Illinois Constitution requires that the rate of tax of the highest class may not exceed two and one-half times the rate of tax of the lowest class and that real property used in farming may not be assessed at a rate higher than residential property.
Since adoption of the original ordinance in 1973, it has been amended more than 20 times. A majority of the amendments dealt with impacting real estate taxes on single-family residential properties, while others dealt with different classes of property.
In 1973, pursuant to the original Ordinance, Class 2 residential property was assessed at 22 percent of market value, Class 3 (apartments with seven units or more) was assessed at 33 percent of market value, while Class 5 (commercial and industrial) was assessed at 40 percent of market value.
Residential properties seemed to receive the most tax breaks in subsequent years. In 1976, Class 2 residential properties were assessed at 17 percent, and in 1977, that percentage was reduced even further to 16 percent. It remained until Ordinance No. 08-0-51 was passed last year.
Over the years, the levels of assessment for commercial and industrial properties were reduced from their highest level (40%) to their present levels (25%). The motivation was to make Cook County real estate taxes competitive with other Illinois counties, especially the collar counties.
The current ordinance divides real estate into nine classes and three subclasses assessed at varying percentages of market value.
Ordinance No. 08-0-51, which last year amended the real property classification system with new percentages for all classes of Cook County real property, will take effect in 2009 for taxes payable in 2010.
In the recent changing of these levels of assessment, Assessor Houlihan has gone on record as saying, “The current turbulence in the real estate and financial markets makes these measures especially urgent. People are angry and confused about their property taxes.”
The changes with the newly adopted ordinance are intended to reduce the burden on homeowners of the cost of government, but real estate taxation may still result in property owners experiencing property tax increases.
It is imperative to closely follow real property values and file annual assessment challenges to ensure reasonable taxation. Taxpayers have a host of remedies to reduce assessments on real property.
To view the informative Web site of the Cook County Assessor, access www.cookcountyassessor.com.
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ISBA past president Leonard Amari was assisted in compilation of this article by attorneys Vesna Marusic and Katherine Amari of Amari & Locallo, Chicago.