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Property taxes are one of the most significant expenses that homeowners in Illinois face. The amount of property taxes that homeowners pay depends on several factors, such as the value of the property, the tax rate of the area, and the exemptions that the homeowner qualifies for. In this blog post, we will take a deep dive into how property taxes are calculated in Illinois, so you can better understand how your property taxes are determined.
Illinois has some of the highest property taxes in the United States. According to a report by WalletHub, Illinois ranks second in the country for the highest property taxes, with an effective property tax rate of 2.30%. This means that for a home with a market value of $200,000, the homeowner would pay an annual property tax of $4,600.
The Factors That Determine Property Taxes in Illinois
Several factors determine how property taxes are calculated in Illinois. These include:
Assessed Value
The assessed value of your property is the first factor that determines your property taxes. The assessed value is the value of your property as determined by the county assessor’s office. The assessed value is based on the fair market value of the property, which is the price that a willing buyer would pay for the property and a willing seller would accept for the property.
The assessed value is determined by several factors, including the size of the property, the age and condition of the property, and the location of the property. The assessed value is typically reviewed every few years, and changes can be made to reflect changes in the property’s value.
Equalization Factor
The equalization factor is a multiplier that is applied to the assessed value of the property to bring it up to the state’s equalization level. The equalization level is the percentage of the market value that the state determines to be the fair market value of the property. The equalization factor ensures that all properties in the state are assessed at the same level.
For example, if the equalization factor is 1.00, then the assessed value of the property is equal to the fair market value of the property. If the equalization factor is less than 1.00, then the assessed value of the property is less than the fair market value of the property.
Exemptions
Exemptions are deductions that homeowners can take to reduce their property taxes. There are several types of exemptions available in Illinois, including:
- Homeowner Exemption
- Senior Citizen Exemption
- Senior Citizen Assessment Freeze Exemption
- Veterans with Disabilities Exemption
- Veterans’ Homestead Exemption
The amount of the exemption varies depending on the type of exemption and the county in which the property is located.
Tax Rate
The tax rate is the final factor that determines the amount of property taxes that homeowners in Illinois pay. The tax rate is calculated by dividing the total amount of property taxes that the local government needs to raise by the total assessed value of all properties in the area.
The tax rate is expressed as a percentage of the assessed value, and it varies by county and by municipality. The tax rate can also change from year to year, depending on the needs of the local government.
Calculating Property Taxes in Illinois
Now that we understand the factors that determine property taxes in Illinois, let’s take a look at how property taxes are calculated. The formula for calculating property taxes in Illinois is:
Property Tax = (Assessed Value x Equalization Factor – Exemptions) x Tax Rate
Let’s break down this formula:
- Assessed Value: This is the value of your property as determined by the county assessor’s office.
- Equalization Factor: This is a multiplier that is applied to the assessed value of the property to bring it up to the state’s equalization level.
- Exemptions: These are deductions that homeowners can take to reduce their property taxes.
- Tax Rate: This is the rate at which property taxes are assessed in the area.
Let’s illustrate this formula with an example. Assume that you own a home in Cook County with an assessed value of $200,000, an equalization factor of 1.00, and a tax rate of 2.50%. You also qualify for a homeowner exemption of $7,000.
Property Tax = ($200,000 x 1.00 – $7,000) x 0.025
Property Tax = $4,975
In this example, you would pay an annual property tax of $4,975.
Important Notes About Property Taxes in Illinois
There are several important notes to keep in mind when it comes to property taxes in Illinois. These include:
Appealing Your Property Assessment
If you believe that the assessed value of your property is too high, you have the right to appeal the assessment. You can do this by filing an appeal with the county board of review. If your appeal is successful, your assessed value will be lowered, and you will pay less in property taxes.
Prepayment of Property Taxes
Illinois law allows homeowners to prepay their property taxes. This means that you can pay your property taxes in advance of their due date. Prepaying your property taxes can help you reduce your tax liability for the following year.
Property Tax Relief Programs
Illinois offers several property tax relief programs for homeowners who qualify. These programs include the Senior Citizen Assessment Freeze Exemption, the Senior Citizens Homestead Exemption, and the Disabled Persons Homestead Exemption.
Conclusion
Property taxes in Illinois are determined by several factors, including the assessed value of the property, the equalization factor, exemptions, and the tax rate. Understanding how property taxes are calculated can help you better manage your finances and plan for the future. If you have any questions about your property taxes, or if you need help appealing your property assessment, contact your local county assessor’s office.
People Also Ask
What is the average property tax rate in Illinois?
The average property tax rate in Illinois is 2.30%, according to a report by WalletHub.
How often are property taxes reassessed in Illinois?
The assessed value of a property is typically reviewed every three to four years, depending on the county.
What is the deadline to pay property taxes in Illinois?
The deadline to pay property taxes in Illinois varies by county, but it is typically in the late summer or early fall.
