illinois property tax assessments

Property Tax Assessments

Harvey Camins, Moderator

Norman Quinn CMI, CRE, Panel Expert

Patrick Doody ESQ, Panel Expert

Ask the Expert Workshop – July 19, 2012



Harvey Camins Managing Director Means Knaus Partners

• Member of BOMA/Chicago Board of Directors• Chairperson of BOMA/Chicago Tax Committee• 2005-2006 BOMA/Chicago President



Norman J. Quinn CMI, CREEquity Property Tax Group

President

• Member of BOMA/Chicago Tax Committee• 30+ years of experience in real estate, finance and taxes



Patrick C. Doody, ESQ

Law Offices of Patrick C. Doody

• Member of BOMA/Chicago Tax Committee• Member of Bar in IL, WI and AZ• Certified Public Accountant• Certified Member of the Professionals in Taxation• Certified Illinois Assessing Officer



Topics Include:• Basics of Illinois Tax System • Tour of County Websites• Effectively Working with the Assessor’s Office • People, Process and Paperwork• 2012 Revaluation


• Revaluation Cycles• Components to An Assessment• Components to A Tax Bill Calculation• Appealing Tax Assessments• Undervaluation Complaints• Tour of County Websites• Landmines & How to Avoid them

Basics of IL Tax System



• Cook County

Triennial System

• Other Counties

Quadrennial System

Off Year Changes

Revaluation Cycles



Four Components

1. Market or Taxable Value

2. The Assessed Value

3. State Equalizer (Multiplier)

4. Levy, Millage, or Tax Rate

How IL Determines Market or Taxable Value



Market or Taxable Value• Date Specific – Annual Assessment Date

1/1 of each year

• Methods to Determine Value– Cost– Income – Market Sales




Determine the Assessment

Apply Formulas

Market Value * Assessment Ratio =

Assessed Value




Determine the Assessment• Assessment Ratio’s

Cook County - Multiple Categories– Office/Industrial = 25%– Residential = 10%

Rest of IL– All Properties =33.33%




State Equalizer (Multiplier):(2011 – 2.9706, 2010 – 3.3)

• Determined annually by state• Equalizer is overall penalty, applied to every property

State Mandated Property to be assessed at 33.33% of value

Cook County Assessment Ratios Lower

Non Cook - may apply at township, county and/or state




Levy, Millage or Tax Rate• Cost to Run Government – Schools, government

services, pension costs etc.

• Simple Math – Net Revenue Required, the budget shortfall, divided by the total tax base valuation




Cook County• Taxes Due = Assessed Value * State Equalizer

(Multiplier) * Tax Levy

• First Installment = 55% of total prior year tax• Second Installment = Taxes Due less the 1st

installment

Property Tax Bill Computation



Non Cook County• Taxes Due = Assessed Value * State Equalizer

(Multiplier) * County / Township Equalizer (Multiplier) * Tax Levy

• Tax rates are set early in the year allowing the bills to be paid in two equal installments

Property Tax Bill Computation



Courts

Circuit Court or Property Tax Appeal

Board

Board of Review

Formal Appraiser Appeal - Optional

Informal Appraiser Interactions - Optional

Appealing Tax Assessments



Assessor - Informal

• Informal Meeting Before Assessments are Set – Potential Informational Packages

• Letter Properties – What are They?– Their Future– Online Access




Assessor Issues Notices – Non Mandatory Appeal Level

Meeting/Appealing:• Appeal Package and Specific Forms• Filing Deadline 30 Days After Notice Issued• Filing of Documentation – 10 Days After Deadline• Assessor Revises or Denies• Potential Assessor Questions• Requests to Re-Review• Change or No Change • Tax Roll Certified – Runs About 3 Weeks After the Appeal Deadline• Tax Roll Published – 7 to 10 Days Later




Board of Review - Mandatory For Appeals

Complete Decisions Before 2nd Installment Due• Appeal Package and New Forms• Board of Review Filing Deadline – about a month after roll certified• Appeal Period - open for about a month• Hearing Scheduled• Potential Board Questions• Decision• Requests to Re-review• Change or No Change




Circuit Court or PTAB - (PTAB = Property Tax Appeal Board)

• Issues Determine Which Forum is Best for Your Case• Filing Deadline Vary by Forum• Resolution Period ~ 2 - 4 Years• PTAB cases can take longer




Courts – Appeal of Decisions

•Unique Issues•Not common




• Who Can File ?– Any Tax payer or rate setting authority– Collar Counties – Schools most active

• Cook County – Property Tax Fairness Board– Created by the City of Chicago ~ 2006– Politically or Publicity Orientation ?– Appear Transaction Oriented ?

Undervaluation Complaints



Only in Illinois – challenge rate setting bodies did not follow proper procedures while setting their levy for the tax year. • Class Action Lawsuits • Resolution 8-10 Years• Raises Issues of Tenant Reimbursement

– Treat as Current – Track Down Tenants– Ignore

Tax Rate Appeal ProcessCook County


Property Tax AssessmentsAssessors Websitewww.cookcountypropertyinfo.com


http://www.cookcountypropertyinfo.com/Pages/pin-search.aspx

http://www.cookcountypropertyinfo.com/Pages/pin-search.aspx


Property Tax Accounting – Understand Your Building

• Paid One Year in Arrears – (2011 are Paid in 2012)

• Accounting - Cash and/or Accrual

Accrual accounting required GAAP

• Lease Escalation Pools

Landmines and How To Avoid Them



Property Tax BillsProcessing Payments:• Must Include Original Bill or Original Re-issued Bill – must be

ordered, can not be printed online• Keep Copy for Other Uses – permits, escalations, tenant questions

Pay in Two Installments:• March 1st - First Installment is 55% of Prior Year• Second Installment – catch up for new: value, equalizer, and tax rate• This Year is Due ~ 8/1 compared to 11/1 last year• Going Forward - New Standard, 1st time since 1978




Property Tax Bills

Late Charges• Unpaid Balances Penalty - 1.5% /mo. or (18%/yr.)• Paid in Full Prior to the Annual Tax Sale • Post Tax Sale Costs Increase• Delinquent Bills - Research on Treasurers Website• Review Bills for “Late” Charges for Prior Years




Tax Appeals• Completing Required Forms - Tight Deadlines• Statements of Affirmation – Who Signs?• Require Notary• Quick Turn Around During Appeal Process




Questions?



People, Process and Paperwork• What is Everyone's Roll?• Required Data• Required Forms• Letter Properties• Appraisal Reports

Effectively Working with The County Assessor



• Role of Property Manager• Role of Consultant/ Attorney

Everyone’s Role



• Owner Lessee Verification Affidavit– Sold or Refinance in Last 5 Years– Accuracy of Income and Expense Data

• Owner Lessee Attorney Verification Form

– Sold Within the Last 3 Years– Appoints Attorney Representing Tax Payer

Most Frequent Forms (Required)



• Vacancy / Occupancy Affidavit– Prior Year– Current Year to Date Actual/ Proforma– Photos, Deal Details, Listing for Sale, etc.




• Letter Properties– Old vs. New Policies

• Appraisal Reports

– Owners / Lenders vs. Property Tax– Informal – Formal– Discovery in Court Proceedings




Responsive actions to Assessors questions

in a narrow time frame.

Appeal Support



• Under Valuation Complaints– Risk– Cannot Plan/Anticipate

Appeals



Questions?



Assessor - New People– Who they are, where they came from, anticipated

changes process and timelines• Joseph Berrios, Assessor• Robert Kruse, Chief Deputy Assessor: (312) 603-6701• Thomas Jaconetty, Deputy Assessor - Valuation:

(312) 603-3155

2012 Revaluation



Board of Review - New People – Who they are, where they came from, stated

preferences• Commissioner Michael Cabonargi

– Chief Deputy Commissioner Aaron Bilton (312) 603-6438

• Commissioner Dan Patlak– Chief Deputy Commissioner Jen Jochum (312) 603-4691

• Commissioner Larry Rogers, Jr.– Chief Deputy Commissioner John Nyhan (312) 603-4166

2012 Revaluation



• Changes in Processes– Letter Properties

• Discussion on CBD Revaluation Cycle

– What Has Happened in Closed Townships– When the CBD Notices Will Be Issued

2012 Revaluation



• Feedback Stories on Negotiations and Appeals to Date

• Online Access to Release Dates

• Board of Review Targeted Completion Dates

2012 Revaluation



Questions?


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