July 31, 2014

Presented by

Senator Christine Radogno 41st District Representative Jim Durkin 82nd District

Representative Ron Sandack 81st District

Property Tax 101Understanding the Property Assessment and Tax Process

Ground Rules Please hold questions until the end. We will open up

for Question and Answer time at the end of the presentation.

We can discuss assessments and taxes in general, but we may be unable to answer questions about any individual parcel in this format.

We will also be available to stay after for any questions we may not be able to answer in the allotted time we have for the presentation.

The Tax Cycle In DuPage County:

State Legislature makes the laws; Each Taxing Body sets its own levy; Township Assessors develop values; County Supervisor of Assessments equalizes

values; County Board of Review hears and acts on

assessment complaints; County Clerk receives and revises tax levies,

and develops tax rates; and County Treasurer sends out the bills.

Limits on Tax Levies Tax levies are limited by:

Limiting Rates (not applicable to all levies)

The Property Tax Extension Limitation Law (PTELL)

New Construction The voters, through referendum

Property Tax ExtensionLimitation Act – 1991

TAX CAP LAW

Limits increases in funds for Districts from year to year to

5% or the Consumer Price Index (CPI)

whichever is lower, regardless of changes in assessments

PTELL BackgroundTax (Extension) Cap

Created to prevent taxing bodies from “balloon levying” Does not restrict individual tax bill changes Enacted 10/01/1991 for Collar Counties Expanded to Cook County on 02/12/1995 May be adopted by referendum in other counties

Prior to PTELL: Average annual tax bill increase in DuPage County was +13.6% (1985 to 1990 Tax Years)

After PTELL: Average annual tax bill increase in DuPage County has been +4.9% (1991 to 2010 Tax Years)

Districts Restricted by Property Tax Extension Limitation Law

Typically Includes schools, Non-Home Rule Municipalities,

parks, fire protection, the County, and Townships

Maximum Tax Rate Set by State Law

Property Tax Increase Limited by Consumer Price Index

Adjustments Allowed for New Property, Annexation and

Other Special Circumstances

Tax Increase May Exceed PTELL Limitation or Maximum

Statutory Rate with Voter Approval (Referendum)

184 Districts are Restricted by PTELL in DuPage County

Developing Tax Rates

Tentative budget

Notice &

Hearing

Approve

Budget

Levy Notice

& Hearin

g

Certify Levy to Clerk

Tax Levies (what governments spend)

Assessed Values (how spending is divided up)

3

3

Where do DuPage taxes go?

Taxing Districts in DuPageFire Protection: 31

Mosquito: 5

Surface Water: 3

Library: 14

Street Lighting: 1

Special Service Areas: 162

Grade Schools: 30

High Schools: 8

Unit School Districts: 10

Junior Colleges: 3

County: 1Forest Preserve: 1

Water Commission: 1Airport Authority: 1

Townships: 9Township Special Police: 4

Township Mosquito: 1Municipalities: 39

Parks: 40Sanitary: 8

Total: 372 Individual Taxing Districts in DuPage County

188 Are Exempted from Property Tax Extension Limitation Law

(35 ILCS 200/1-55) Sec. 1-55. 33 1/3%. One-third of the fair cash value of property, as

determined by the Department's sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for the studies were collected.

(Source: P.A. 86-1481; 87-877; 88-455.)

Definition: Assessed Value

1

Is an estimate of value of the property initially calculated by the local township assessor.

Is based upon statistical data from neighborhood property sales and individual property characteristics of record.

The assessment is required to represent one-third of the property’s fair market value as measured from the three prior years’ sales activity.

Independent from the local assessment offices, the Illinois Department of Revenue annually compiles statistics comparing actual sales and assessed values to monitor the accuracy of assessed values.

Assessed Value

Assessed Value is determined by Mass Appraisal Method, which assuming average condition and including sales from the prior three years.

Independent Appraisal Value is for a value to date, typically only looking at sales and activity within the last six months.

Assessed vs. Appraised

EAVs must be based on:Fair Cash Value (35 ILCS 200/1-50)

Multiplied by 33.33% (except Cook County)(35 ILCS 200/9-145)

As of January 1 of the assessment year(35 ILCS 200/9-95)

Based on the three prior years of sales(35 ILCS 200/1-55)

The Case-Schiller Index shows how 3-year means can differ from current values:

Assessed vs. Appraised

Case-Schiller Index (National)

Case-Schiller Index (National)

Case-Schiller Index (Chicago)

Case-Schiller Index (Chicago)

Assessments and Equalization ensures that the tax burden is equitably distributed across boundary lines.

Assessment Process

Assessments and Equalization ensures that the tax burden is equitably distributed across boundary lines.

Exemptions and Preferential Assessments shift the tax burden from certain properties to other properties.

Assessment Process

2014 Homestead Exemptions

General ($6,000 Assessed) Owner-Occupied 272,677 granted in DuPage County

Senior Citizen ($5,000 Assessed) Owner Occupant must be 65+ by

December 31 55,061 granted in DuPage County

2014 Homestead Exemptions Senior Citizen Assessment Freeze

Owner Occupant must be 65+ by December 31 and must be owner of record on starting on January 1, 2013 and January 1, 2014 (prior two Januarys).

Household income cannot exceed $55,000 Exempts any increases to assessed value

over base year 5,414 granted in DuPage County

Homestead Improvement (up to $25,000 Assessed/$75,000 market) 7,310 granted for a 4 year period in DuPage

2014 Homestead Exemptions

Disabled Persons ($2,000 Assessed) Owner Occupant must have Class 2

disability 2,401 in DuPage

Disabled Veterans (Up to $5,000 Assessed) Owner Occupant must be disabled

veteran 566 in DuPage

Returning Veterans ($5,000 Assessed) 10 in DuPage

Effects of Exemptions Exemptions Reduce the Total Amount

of Taxable Assessed Value Exemptions Increase the Tax Rate Exemptions DO NOT Decrease the

Total Amount of Real Estate Tax Collected

Exemptions Shift the Tax Burden to Others

As a Result, Exemptions Increase Individual Tax Amount for Others

2

How Do I Apply? Exemptions Granted Automatically by Township Assessor

General (Residential): Granted based on sales data and billing

information. Assuming your Township Assessor believes your home

is owner occupied, a formal application is not required.

Home Improvement: Granted when your assessed value

increased due to a physical change to your owner occupied single

family home.

If you have a residential or improvement exemption question,

please contact your Township Assessor.

How Do I Apply? – Continued

Exemptions Requiring a Formal Application with the Supervisor of Assessments Office:

Senior Homestead: 65 years-old

Senior Citizens Assessment Freeze: Household Income of $55,000 or

Less

Disabled Veterans’ (Standard): Service Related Disability (+50%)

Returning Veterans’: For the year you returned home from active duty

and the following year

Disabled Persons’: Cannot Participate in any Substantial Gainful Activity

These exemptions are applicable to the applicant’s primary residence only, that is owned by the applicant(listed on the deed), and where the applicant is responsible for the payment of the real estate tax.

How Do I Appeal My Assessment?

Informal Appeal: Contact your Township Assessor

Timeframe: The sooner, the better (A safe bet is by June

outside of Cook Co)

Process: Provide documentation of concern Fair Cash Value: Sales data of subject property and/or comparable

properties, appraisal

Equity of Assessed Value: Analysis of subject property’s

assessment and comparable properties

Contention of Law: Disagreement with interpretation of Property Tax

Code

Note: The Township Assessor is empowered to alter the

assessment on your behalf without you filing a formal

appeal. You do not need to hire a property tax attorney,

representative, or appraiser at this point. Your elected

assessor and designated their staff are there to assist in

this process.

Grounds for Successful Assessment Appeal

Overvaluation

Unequal Treatment (Equity)

Contention of Law

My Taxes are Too High!

Overvaluation Assessment Appeal

The assessment implies a fair cash value above the three year median estimate of market value.

“I recently purchased my home for $300,000, yet the assessment translates to fair cash value of

$500,000.”

Appropriate Evidence: Sale price and terms of subject property, comparable sales, appraisal, etc.

Unequal Treatment (Equity) Appeal

Assessed Value is not reasonable in the context of the value placed upon other similar properties.

“There are 10 nearly identical homes as mine within my subdivision, my house is assessed $50K more

that all of the others.”

Appropriate Evidence: Equity comparison. Using units of comparison are helpful such as comparing the assessed value per square foot of living area of the subject and comparable homes.

Contention of Law Disagreement with the interpretation of a

specific portion of the Property Tax Code.

“I own a 50 acre farm and I was denied the preferential agricultural assessment.”

Appropriate Evidence: Cite relevant statue and explain the applicability to the subject property.

How Do I Appeal My Assessment? - Continued

1st Formal Step: County Board of Review

Timeframe: As soon as the assessment is officially set by township assessor. (Townships by statute must complete their re-evaluation on or before 11/15/2014)

Process: File a timely assessment appeal form including appropriate value and/or assessment documentation.

Please see Board of Review Rules of procedural information.

(available on www.DuPageCo.org/SOA)

How Do I Appeal My Assessment? - Continued

2nd Formal Step: Property Tax Appeal Board (PTAB) State Level

Timeframe: You may appeal this decision to the PTAB by filing a petition for review within 30 days after County Board of Review notice is mailed.

Process: File a timely assessment appeal form including appropriate value and/or assessment documentation .

Please see Illinois Property Tax Appeal Board of procedural information.

(available on www.ptab.illinois.gov)

Assessment Appeal TrackTownship Assessor

(Informal – Not Required)

County Board of Review (Formal: Administrative)

Circuit or Appeal Court(Formal: Civil)

Civil Court Appeal(Formal: Civil)

ClerkCalculatesTax Rates

Developing Tax Rates

Tentative budget

Notice &

Hearing

Approve

Budget

Levy Notice

& Hearin

g

Certify Levy to Clerk

Township Assessor Values

SOAReview

/Equaliz

e

ChangeNotic

es

BORHearin

g

Certify Values

to Clerk

Tax Levies (what governments spend)

Tax Rates (where they meet):(Billable EAV ÷ Tax Levy)

Treasurer

SendsTax Bills

Assessed Values (how spending is divided up)

Individual Bill Calculation

Home Value $300,000 = $100,000 Assessed Value

Assessed Value $100,000Less General Exemption -6,000Less Senior Exemption -5,000

Total Billing Value =$ 89,000

Tax Rate X 5.5380Tax Bill Total = $4,928.82

Tax Cap Calculation

District Extension X C.P.I. (funds received)

Total Assessed Value of the District O New Construction

Example:

$26,000,000 X 3.3%

$960,000,000 - 31,000,000

= Limiting Rate

= 2.8911

2013 Property Tax Bills

In the 2013 tax year, assessed values of homes dropped by a median rate of 7.4%.

However, tax bills for those same homes increased by a median rate of 0.3%.

47% of homeowners have bigger tax bills than last year, even though their assessed values were lower.

Data for DuPage County 2013 taxable year

Whom Should I Call?

Taxing Body Levies and Rates:The Individual Tax Body as listed on

your property tax bill. (ex. School District, Municipality). List available online at:

DuPage County Clerk(630) 407-5500 www.DupageCo.org/CountyClerk/

Whom Should I Call? Assessments of Individual Properties:

Your Local Assessors OfficeLisle Township Assessor(630) 968-1183www.lisletownshipassessor.com

Downers Grove Township Assessor(630) 719-6600www.dgtownship.com

Assessment Appeals or Exemptions:DuPage County Assessment Office(630) 407-5858www.DupageCo.org/SOA

Whom Should I Call?

Tax Bills:DuPage County Treasurer(630) 407-5900www.DupageCo.org/Treasurer

Questions and DiscussionThank You!

Warren L. Dixon III, CIAONaperville Township Assessor

John Trowbridge II, CIAOLisle Township Assessor

Theresa A. Cockrell, CIAODowners Grove Township Assessor