State Representative Ron Sandack Presents Property Taxes in DuPage: Understanding the Assessment Process
May 16, 2015
State RepresentativeRon Sandack
Presents
Property Taxes in DuPage: Understanding the Assessment Process
Overview of the Property Tax System – DuPage County
Illinois Property Tax – Ancient History
• 1818 – 1932: State Levied a Centralized Property Tax
(on Personal Property and Real Estate)
• 1933: Property Taxes Levied, Collected and Spent at the Local Level
• 1939: Revenue Act of 1939 Enacted
(Foundation of current Real Property Tax Code)
• 1970: Illinois Constitution Amended to Eliminate Tax on Personal Property
by 1979 (Non-Real Estate)
Recent History(Tax Year Affected Referenced)
• 1972: General Assembly Enacts Senior Homestead Exemption
• 1978: General Assembly Enacts General (Residential) Homestead
• 1991: Property Tax Extension Limitation Law (PTELL) Enacted
• 1994: Senior Assessment Freeze Enacted (DuPage Initiative)
• 2007: Three New Homestead Exemptions Enacted
DuPage Property Tax SystemBy the Numbers
Variable 2011 pay 2012 Tax Year
Parcels of Real Estate: 334,889
Residential Homestead Exemptions Granted: 270,834
Senior Exemptions Granted: 49,664
Senior Assessment Freeze Exemptions Granted: 14,670
Total Assessed Value (Net Taxable After Exemptions): 37,694,225,826
Tax Districts/Units of Government Receiving Tax: 382
Tax Collected: $2,493,604,956
What Determines My Property Tax Amount?
(1) Assessed Value
(2) Exemptions
(3) Tax Levy (Rate)
Tax Bill
Subtract if any
Multiply by
Equals
(1) Assessed Value
• Is an estimate of value of the property initially calculated by the local
township assessor.
• Is based upon statistical data from actual property sales and
property physical 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.
1
Assessment Cycle
By January 1st (County Clerk): List of Taxable Property Prepared
By November 15th (Township Assessor): Property is Valued as of 01/01
(Supervisor of Assessments): Calculates Equalization Factor*, Mails Change of Assessment Notice*, Publishes Assessment Changes
Note: Appeal Deadline is 30 Days After Assessment Publication
(Illinois Department of Revenue): Calculates Tentative State Equalization Factor
(Board of Review): Holds Assessment Hearings, Calculates Board Equalization Factor*
(Illinois Department of Revenue): Calculates Final State Equalization Factor
Assessed Values Certified to County Clerk in March of Following Year
* If Required
Quality Control – Oversight
• Illinois Law recognizes the need for an objective method to measure the accuracy and quality of locally produced assessed values.
• To that end, the Illinois Department of Revenue is charged with the responsibility to monitor the performance of local assessment officials on an annual basis.
Excerpt from Real Estate Transfer Declaration
Form Instructions
Annual Sale to Assessment Ratio Study
• As required by State Law, the ratio studies are complied independently by the Illinois Department of Revenue on an annual basis.
• The studies are a statistical comparison of actual sales prices and their corresponding assessed values.
• All property sales are analyzed.
• Only sales occurring under normal circumstances are included in the study:– Arms-length transactions – Neither party under duress– Reasonable exposure to the market
• Reports are used by the State to:– Verify compliance to statutory level of assessment– Calculate equalization factors if assessed values are not at statutory level of assessment – Test accuracy of locally produced assessed values– Measure quality (uniformity) of assessed values
Definition: 33 1/3% (Level of Assessment)
(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.)
Implications of 3-Year Averaging: Appreciating Real Estate Market
• Action: The assessments are calculated from
sales occurring when prices were typically lower.
• Result: Assessed values lag behind current
market values.
Example: Final 2006Actual Sale to Assessment Ratio Study Results as Certified by the Illinois Department of Revenue
Township Adj. 2003 Median Adj. 2004 Adj. 20053-Year Ave.
Addison 34.79% 34.60% 30.66% 33.35%
Bloomingdale 34.62% 34.13% 31.24% 33.33%
Downers Grove 35.11% 34.09% 30.41% 33.20%
Lisle 34.78% 33.88% 31.11% 33.26%
Milton 35.17% 33.46% 31.10% 33.24%
Naperville 34.74% 33.85% 31.41% 33.33%
Wayne 34.36% 33.85% 31.56% 33.26%
Winfield 35.17% 33.93% 31.32% 33.47%
York 34.95% 34.48% 30.18% 33.20%
Source: Illinois Department of Revenue, GREEN = Single-Year Below 33.33%, RED = Single-Year Above 33.33%.
Implications of 3-Year Averaging: Depreciating Real Estate Market
• Action: The assessments are calculated from sales
occurring when prices were typically higher.
• Result: Assessed values are above current market
values.
Example: Final 2010
Adj. 2007 Adj. 2008 Adj. 2009 3-Year Ave.
Addison 28.89% 31.40% 38.50% 32.93%
Bloomingdale 30.47% 32.58% 36.95% 33.33%
Downers Grove 30.75% 32.68% 36.57% 33.33%
Lisle 31.36% 32.71% 35.92% 33.33%
Milton 31.33% 32.96% 35.70% 33.33%
Naperville 31.40% 32.82% 35.77% 33.33%
Wayne 30.84% 32.95% 36.19% 33.33%
Winfield 30.64% 32.90% 36.45% 33.33%
York 30.79% 32.76% 36.43% 33.33%
Source: Illinois Department of Revenue, PTAX-215, Dated 03/08/2011
Property Value Trends
Source: Standard & Poor’s Case-Shiller© Chicago Area Home Price Index (as of January for each year)
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
60
80
100
120
140
160
180
Single Year Data
Current
Year
Sta
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& P
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Ca
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Comparison of Current Value and 3-Year Average
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
60
80
100
120
140
160
180
Single Year v. 3-Year Average
Current
3-Year
Year
Sta
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Comparison of Current Value and 3-Year Average 2006 vs. 2010
2006 Assessment Year
Median 2006 Sale to
2006 Assessment Ratio
was 28.43%
2010 Assessment Year
Median 2010 Sale to
2010 Assessment Ratio is
38.10% Source: Illinois Department of Revenue
2006 2007 2008 2009 2010 2011
115
125
135
145
155
165
175
Single Year v. 3-Year Average: 2006 - 2011
Cur-rent3-Year
Year
Sta
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& P
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Ca
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What About This Year?(Prior to any Changes for 2012)
Adj. 2009 Adj. 2010 Adj. 2011 3-YearLevel
AdjustmentRequired
Addison 33.97% 36.04% 41.23% 37.08% -10.11%
Bloomingdale 33.85% 36.08% 41.58% 37.17% -10.33%
Downers Grove 34.19% 35.32% 38.38% 35.96% -7.31%
Lisle 33.92% 34.91% 37.48% 35.44% -5.95%
Milton 33.50% 35.17% 38.12% 35.60% -6.38%
Naperville 33.75% 35.25% 37.87% 35.62% -6.43%
Wayne 33.67% 35.10% 39.41% 36.06% -7.57%
Winfield 33.68% 36.05% 40.77% 36.83% -9.50%
York 33.47% 35.11% 39.98% 36.19% -7.90%
Global Assessment Changes ≠ Bill Changes
• Action: All assessed values within your township are reduced by 10%.
• Result: Assuming all other variables do not change, property tax bill amounts remain constant.
Individual Assessment Change = Bill Change
• Action: My assessed value is increased by 10% while all of my neighbors assessments remained the same.
• Result: My proportionate share of the total tax burden (my bill) will increase when compared to my neighbors.
How Do I Appeal My Assessment?
Informal Appeal: Contact your township assessor
• Timeframe: The sooner, the better
• 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
• Note: The township assessor is empowered to alter the
assessment on your behalf without you filing a formal appeal.
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 11/15/2013)
• 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)
Assessment Appeal Track
Township Assessor(Informal – Not
Required)
County Board of Review
(Formal: Administrative)
Circuit or Appeal Court
(Formal: Civil)
Civil Court Appeal(Formal: Civil)
Illinois Property Tax Appeal Board
(Formal: Administrative)
Administrative Review
(Formal: Administrative)
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 current 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.
(2) Exemptions
• Reduce the taxable assessed value for
recipients of the exemptions.
• Shift tax liability between taxpayers.
• Typically do not reduce the total amount of
tax collected.
2
What Homestead Exemptions are Available?
Program NameAssessment Deduction
Typical Tax Shift
General (Residential): 6,000 $379
Home Improvement: 25,000 (Max.) $1,579
Returning Veterans’: 5,000 $316
Disabled Veterans’ (Adaptive Housing): 70,000 (Max.) $4,420
Disabled Veterans’ (Standard): 5,000 (Max) $316
Disabled Persons’: 2,000 $126
Senior Homestead: 5,000 $252
Senior Citizens Assessment Freeze: 28,149 (Ave.) $1,778
Note: Homestead Exemptions shift a portion of the recipients property tax burden onto other tax payers.
How Do I Apply?
Exemptions Typically Granted by Township Assessor Automatically
• General (Residential): Assuming your township assessor believes your
home is owner occupied, a formal application may not be required.
• Home Improvement: If your township assessor increases your assessed
value because of a physical change to your owner occupied single family
home, then the assessor will initiate the exemption on your behalf.
• 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, and where the applicant is responsible for the payment of the real estate tax.
(3) Tax Rate
• Calculated by County Clerk• Represents the sum of the legally allowed
revenue requests for the taxing bodies in the subject property’s area spread against the total taxable value
• There are 372 taxing bodies in DuPage County for the 2010 pay 2011 Tax Year
3
3
Taxing Body Budget, Levy and Extension Cycle
(Process Starts in October for Many Districts – Ends in December)
Publishes Tentative Budget
Holds Public Budget Hearing
Passes Budget and Tax Levy
Truth-in-Taxation Publication
If Required, Holds Truth-in-Taxation Hearing
Certifies Levy to County Clerk for Tax Rate CalculationDeadline: Last Tuesday in December
Basic Categories of Tax Districts in DuPage County
• Districts Restricted by the Property Tax Extension
Limitation Law (PTELL) a.k.a. Tax (Extension) Cap
• Districts Not Governed by PTELL
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
• 184 Districts are Restricted by PTELL in DuPage County
Districts Exempted from PTELL
• Typically Includes Home Rule Municipalities and Special Service Area Districts
• Maximum Tax Rate Not Set By State Law
• Property Tax Increase Not Limited by PTELL
• 188 Districts were not Covered by PTELL for 2010 pay 2011 Bills in
DuPage County
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)
Where Does My Money Go?
Chart Provided by County Clerk’s Office
Tax Rate Calculation
District Levy (Tax Revenue Request)
÷ Total (Net Taxable) Assessed Value
= Tax Rate
Tax Rate Calculation Example 1 (2008)
County of DuPage, 2008 pay 2009 Levy
District Levy (Tax Revenue Request) : $66,806,020÷ Total (Net Taxable) Assessed Value: 42,906,884,976
= Tax Rate: 0.001557(or 0.1557 $ per 100)
Source: DuPage County Clerk
Tax Rate Calculation Example 2 (2009)
County of DuPage, 2009 pay 2010 Levy
District Levy (Tax Revenue Request) : $66,634,870÷ Total (Net Taxable) Assessed Value: 42,879,581,802
= Tax Rate: 0.001554(or 0.1554 $ per 100)
(-0.3% Decrease from Prior Year Levy)
Source: DuPage County Clerk
Tax Rate Calculation Example 3 (2010)
County of DuPage, 2010 pay 2011 Levy
District Levy (Tax Revenue Request) : $66,942,567÷ Total (Net Taxable) Assessed Value: 40,351,156,012
= Tax Rate: 0.001659(or 0.1659 $ per 100)
(+0.5% Increase from Prior Year Levy)
Source: DuPage County Clerk
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: 1
Forest Preserve: 1
Water Commission: 1
Airport Authority: 1
Townships: 9
Township Special Police: 4
Township Mosquito: 1
Municipalities: 39
Parks: 40
Sanitary: 8
Total: 372 Individual Taxing Districts in DuPage County
188 Are Exempted from Property Tax Extension Limitation Law
Important Resources
Township Assessors(Assessed Value Questions, General or Home Improvement Homestead Exemptions)
Addison: (630) 530-8161, www.addisontownship.com
Bloomingdale: (630) 529-6927, www.bloomingdaletownshipassessor.com
Downers Grove: (630) 719-6630, www.DGTAO.com
Lisle: (630) 968-1183, www.lisletownshipassessor.com
Milton: (630) 653-5220, www.miltontownshipassessor.com
Naperville: (630) 355-2444, www.napervilletownship.com
Wayne: (630) 231-8900, www.waynetownshipassessor.com
Winfield: (630) 231-3573, www.winfieldtownship.com
York: (630) 627-3354, www.yorkassessor.com
Important Resources – Continued
County Offices: Property Tax Related County Clerk: (630) 407-5540 http://www.dupageco.org/countyclerk/• Billing Address Change • Download an Individualized Property Tax Distribution Report • Taxing District Boundary/Levy/Tax Rate Information
Supervisor of Assessments: (630) 407-5858, http://www.dupageco.org/SOA• Assessment Appeal Deadline Information, Forms• Download Duplicate Change of Assessment Notices• General Information About Equalization Factors • Senior, Senior Freeze, Disabled Persons’ Homestead Exemptions
Treasurer: (630) 407-5900, http://www.dupageco.org/treasurer/• Apply for the Senior Tax Deferral Program• Check your Property Tax Payment Status• Download a Duplicate Copy of Your Property Tax Bill• Enroll in Monthly Property Tax Prepayment Plan
Important Resources – Continued
State Offices : Property Tax Related
Illinois General Assembly http://www.ilga.gov/• View Illinois Property Tax Code• Review Pending Legislation • Contact your Legislators
Illinois Department of Revenue, Local Government Services, Property Tax Division: (217) 782-3627
http://www.revenue.state.il.us/LocalGovernment/PropertyTax/• State-wide Property Tax Statistics Reports• General Property Tax Related Publications
Property Tax Appeal Board: (217) 782-6076, http://www.state.il.us/agency/ptab/• Provides a Venue to Appeal a Local Board of Review Decision • Appeal Forms and Procedure Information Available for Download on Website • Check Status of a Pending PTAB Hearing
Questions & Answers
Thank You!