Illinois Property Tax Assessments

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

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Illinois Property Tax Assessments

  1. 1. Ask the Expert Workshop – July 19, 2012Property Tax Assessments Harvey Camins, Moderator Norman Quinn CMI, CRE, Panel Expert Patrick Doody ESQ, Panel Expert
  2. 2. Property Tax Assessments 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 Ask the Expert Workshop – July 19, 2012
  3. 3. Property Tax Assessments Norman J. Quinn CMI, CRE Equity Property Tax Group President• Member of BOMA/Chicago Tax Committee• 30+ years of experience in real estate, finance and taxes Ask the Expert Workshop – July 19, 2012
  4. 4. Property Tax Assessments 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 Ask the Expert Workshop – July 19, 2012
  5. 5. Property Tax AssessmentsTopics Include:• Basics of Illinois Tax System• Tour of County Websites• Effectively Working with the Assessor’s Office• People, Process and Paperwork• 2012 Revaluation Ask the Expert Workshop – July 19, 2012
  6. 6. Property Tax Assessments Basics of IL Tax System• 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 Ask the Expert Workshop – July 19, 2012
  7. 7. PropertyRevaluation Cycles Tax Assessments• Cook County Triennial System• Other Counties Quadrennial System Off Year Changes Ask the Expert Workshop – July 19, 2012
  8. 8. How IL Determines Market orProperty Tax Assessments Taxable ValueFour Components1. Market or Taxable Value2. The Assessed Value3. State Equalizer (Multiplier)4. Levy, Millage, or Tax Rate Ask the Expert Workshop – July 19, 2012
  9. 9. How IL Determines Market orProperty Tax Assessments Taxable ValueMarket or Taxable Value• Date Specific – Annual Assessment Date 1/1 of each year• Methods to Determine Value – Cost – Income – Market Sales Ask the Expert Workshop – July 19, 2012
  10. 10. How IL Determines Market orProperty Tax Assessments Taxable ValueDetermine the AssessmentApply Formulas Market Value * Assessment Ratio = Assessed Value Ask the Expert Workshop – July 19, 2012
  11. 11. How IL Determines Market orProperty Tax Assessments Taxable ValueDetermine the Assessment• Assessment Ratio’s Cook County - Multiple Categories – Office/Industrial = 25% – Residential = 10% Rest of IL – All Properties =33.33% Ask the Expert Workshop – July 19, 2012
  12. 12. How IL Determines Market or Property Tax Assessments Taxable ValueState Equalizer (Multiplier):(2011 – 2.9706, 2010 – 3.3)• Determined annually by state• Equalizer is overall penalty, applied to every propertyState Mandated Property to be assessed at 33.33% of valueCook County Assessment Ratios LowerNon Cook - may apply at township, county and/or state Ask the Expert Workshop – July 19, 2012
  13. 13. How IL Determines Market or Property Tax Assessments Taxable ValueLevy, 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 Ask the Expert Workshop – July 19, 2012
  14. 14. Property Tax Assessments Property Tax Bill ComputationCook 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 Ask the Expert Workshop – July 19, 2012
  15. 15. Property Tax Assessments Property Tax Bill ComputationNon 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 Ask the Expert Workshop – July 19, 2012
  16. 16. Property TaxTax Assessments Appealing Assessments Courts Circuit Court or Property Tax Appeal Board Board of Review Formal Appraiser Appeal - Optional Informal Appraiser Interactions - Optional Ask the Expert Workshop – July 19, 2012
  17. 17. Property TaxTax Assessments Appealing AssessmentsAssessor - Informal• Informal Meeting Before Assessments are Set – Potential Informational Packages• Letter Properties – What are They? – Their Future – Online Access Ask the Expert Workshop – July 19, 2012
  18. 18. Property TaxTax Assessments Appealing AssessmentsAssessor Issues Notices – Non Mandatory Appeal LevelMeeting/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 Ask the Expert Workshop – July 19, 2012
  19. 19. Property TaxTax Assessments Appealing AssessmentsBoard of Review - Mandatory For AppealsComplete 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 Ask the Expert Workshop – July 19, 2012
  20. 20. Property TaxTax Assessments Appealing AssessmentsCircuit 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 Ask the Expert Workshop – July 19, 2012
  21. 21. Property TaxTax Assessments Appealing AssessmentsCourts – Appeal of Decisions•Unique Issues•Not common Ask the Expert Workshop – July 19, 2012
  22. 22. Property Tax Assessments Undervaluation Complaints• 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 ? Ask the Expert Workshop – July 19, 2012
  23. 23. Tax Rate Appeal Process Property Tax Assessments Cook CountyOnly in Illinois – challenge rate setting bodies did not followproper 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 Ask the Expert Workshop – July 19, 2012
  24. 24. Assessors WebsiteProperty Tax Assessments www.cookcountypropertyinfo.com http://www.cookcountypropertyinfo.com/Pages/pin-search.aspx Ask the Expert Workshop – July 19, 2012
  25. 25. Landmines andPropertyHow ToAssessments Tax Avoid ThemProperty 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 Ask the Expert Workshop – July 19, 2012
  26. 26. Landmines and PropertyHow ToAssessments Tax Avoid ThemProperty 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 questionsPay 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 Ask the Expert Workshop – July 19, 2012
  27. 27. Landmines and PropertyHow ToAssessments Tax Avoid ThemProperty Tax BillsLate 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 Ask the Expert Workshop – July 19, 2012
  28. 28. Landmines andPropertyHow ToAssessments Tax Avoid ThemTax Appeals• Completing Required Forms - Tight Deadlines• Statements of Affirmation – Who Signs?• Require Notary• Quick Turn Around During Appeal Process Ask the Expert Workshop – July 19, 2012
  29. 29. Property Tax Assessments Questions? Ask the Expert Workshop – July 19, 2012
  30. 30. Effectively Working with TheProperty County Assessor Tax AssessmentsPeople, Process and Paperwork• What is Everyones Roll?• Required Data• Required Forms• Letter Properties• Appraisal Reports Ask the Expert Workshop – July 19, 2012
  31. 31. Property Tax Assessments Everyone’s Role • Role of Property Manager • Role of Consultant/ Attorney Ask the Expert Workshop – July 19, 2012
  32. 32. Most Frequent FormsProperty Tax Assessments (Required)• 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 Ask the Expert Workshop – July 19, 2012
  33. 33. Most Frequent Forms Property Tax Assessments (Required)• Vacancy / Occupancy Affidavit – Prior Year – Current Year to Date Actual/ Proforma – Photos, Deal Details, Listing for Sale, etc. Ask the Expert Workshop – July 19, 2012
  34. 34. Most Frequent Forms Property Tax Assessments (Required)• Letter Properties – Old vs. New Policies• Appraisal Reports – Owners / Lenders vs. Property Tax – Informal – Formal – Discovery in Court Proceedings Ask the Expert Workshop – July 19, 2012
  35. 35. Property Tax Assessments Appeal Support Responsive actions to Assessors questions in a narrow time frame. Ask the Expert Workshop – July 19, 2012
  36. 36. Property Tax Assessments Appeals• Under Valuation Complaints – Risk – Cannot Plan/Anticipate Ask the Expert Workshop – July 19, 2012
  37. 37. Property Tax Assessments Questions? Ask the Expert Workshop – July 19, 2012
  38. 38. Property TaxRevaluation 2012 AssessmentsAssessor - 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 Ask the Expert Workshop – July 19, 2012
  39. 39. Property TaxRevaluation 2012 AssessmentsBoard 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 Ask the Expert Workshop – July 19, 2012
  40. 40. Property TaxRevaluation 2012 Assessments• Changes in Processes – Letter Properties• Discussion on CBD Revaluation Cycle – What Has Happened in Closed Townships – When the CBD Notices Will Be Issued Ask the Expert Workshop – July 19, 2012
  41. 41. Property TaxRevaluation 2012 Assessments• Feedback Stories on Negotiations and Appeals to Date• Online Access to Release Dates• Board of Review Targeted Completion Dates Ask the Expert Workshop – July 19, 2012
  42. 42. Property Tax Assessments Questions? Ask the Expert Workshop – July 19, 2012

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