Trick or Treat? It's Your Property Tax Bill

Halloween may be right around the corner, but receiving your second installment of your property tax bill right now may seem more like a trick than a treat. Call it a bad costume or call it an evil joke, but if you are a homeowner then you are seeing your property taxes actually go up as your property value goes down. According to the National Taxpayer's Union, an advocacy group from Washington, D.C., up to 60 percent of taxable property in the U.S. is assessed at a value that's higher than it should be.

The Cook County Assessor has sent out second installment property tax bills and there is no way around it. If you own a property, real estate taxes are an obligation, which must be paid. But, it is possible that you are paying more than your fair share. Fortunately, there are steps that you can take to appeal your property taxes.

“Unfortunately, less than half of homeowners even try to appeal their property taxes. Most property owners don't appeal because they either don't understand the process, or feel that the amount of research and paperwork won't be worth their time,” said Michael Hobbs, president of PahRoo Appraisal & Consultancy and associate member of the Appraisal Institute.

“Every property owner should look at their current bill and then review the Cook County Assessor’s assessed value of their property, because there may be valid reasons to appeal their property taxes,” said Mr. Hobbs.

Three reasons your property taxes may be too high:

1. Lack of Uniformity. The basis for lack of uniformity simply means that if your residence is dissimilar to all other properties in primary characteristics such as size, type of construction, age or style, then you may have good reason for filing an appeal.

2. Inaccurate Description. The basis for inaccurate description references the physical data the Cook County Assessor has for your residence, such as building, land size or property class. Possibly, you have a Bungalow with an unfinished attic and basement but the assessor indicates they are finished, which would be an inaccurate description.

3. Assessed Value Exceeds Market Value. More recently the Cook County Assessor simplified the calculation for Assessed Value so that owners of residential property can look at their assessment information and multiple the total assessed value by ten, which indicates what the Assessor thinks your home is worth as of the January 1st of the year in question. If you believe that the Assessed Value exceeds the market value of your residence, you can provide evidence and documentation (such as a recent closing statement, sales contract or appraisal) to support your claim that the property is overvalued.

Should you do it yourself or hire a pro? It all depends on your desire to save money and willingness to do a little homework. The initial filing process for the Cook County Assessor is quite simple and starts with a form, as outlined on their web site. The main factor is complying with the appeal deadlines, which vary by township.

If you do not have evidence of the decline in the market value of your home, then you’ll need to hire an appraiser. “A market analysis, known commonly as a CMA and provided by a realtor, may be very accurate, but it is not considered an appraisal by the Assessor and will not be considered as evidence. Therefore, a property owner should be diligent in hiring a certified appraiser with experience in property tax appeal appraisals,” says Mr. Hobbs.

Given the concern of rolling deadlines and convenience for townships, a number of homeowners have opted to hire an attorney, which specializes in property tax appeals. The benefit is that they focus on this one area of law, yet the downside is that they charge a percentage of the first year’s savings, which may be 30 to 50%.
The bottom-line is although you may experience your recent second installment property tax bill as a trick, possibly by appealing your taxes at the next available period, you could receive a treat, in the form of a refund check!

Tagged as: real estate taxes, Chicago real estate, Appraised values, Halloween 2011, finance and housing

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Terri Lee Ryan is a former Chicago commercial real estate broker, marketing consultant and hotel developer. An avid writer, she is the author of Life Is One Big To-Do List. In “People, Places and Property” she dishes on leaders in real estate, new places in your neighborhood and deals being done in Chicago.