Most people, when considering buying a new home, are fearful of one large cost that directly impacts how much money they might have in their bank account at the end of the year…the dreaded property tax. While there are 102 counties in Illinois, according to the Illinois Attorney General’s office (http://www.illinoisattorneygeneral.gov/children/kids/illinois_facts.html), Lake County’s property taxes are among the highest in Illinois (Urban Institute-Brookings Institution Tax Policy Center). In order to better understand the Lake County property taxation scheme, it is important to understand its history, what constitutes “property”, and how the tax is calculated. Increasing your knowledge about the Lake County property tax is not only a great way to determine the likely long-term cost associated with purchasing real property in Lake County, Illinois, but it will also give you insight into whether there might be a way to reduce your property tax burden by pursing an appeal of your property tax assessment.
History of the Lake County Property Tax
Since 1818, when Illinois became a state, the Illinois Constitution has allowed the state and local taxing districts to tax property in direct proportion to its value, a logical provision….Someone who owns a lot of land should be taxed more than someone who owns a little bit of land. The property of citizens who live in areas that are considered “nicer” or “wealthier” is generally going to be assessed at a higher value because their land is more valuable than someone who lives on less desirable land (like on a swamp land, for example). Moreover, property owned by people who use their property to make money is assessed differently than the property of those who do not. 1932 was the last year in which the State of Illinois imposed real estate taxes. Since then, property taxes have been imposed by local government taxing districts only. Many decades after the ratification of the provision in the State constitution, local townships began to work on giving local government not only the power, but also the wherewithal, to levy taxes. In fact, since 1932, local principalities, rather than the State of Illinois, have been in charge of levying taxes and must do so by following Illinois Department of Revenue (“IDOR”) guidelines. Now, local townships and counties determine valuations of properties for taxation by their respective taxing district. It is important to remember that Lake County property taxes are levied through the county, not the state, and that they are spent by local, not state, government. This also means that if you want to try to reduce your property tax burden because you feel like you have been cheated, and you chose to hire a Lake County property tax appeal law firm, you are fighting the local, not the state, government. An understanding of the history of the taxation of property in Illinois is beneficial, but it is not as important as understanding how your property taxes are determined. In order to do this, it is imperative.
Lake County “Property” Determination
Before your local township can assess your real property’s value, Lake County divides your assets into two separate categories:
Real Property: Lake County defines “real” property as land and anything that is permanently attached to the land. This would include buildings that you own, since they are attached to the land, as well as the land itself.
Personal Property: “Personal” property is all of the property that you own that is not real property. Thus, if you own cars, furniture in your house, or raise livestock in your yard, they all constitute “personal” property. Lake County’s township assessors then assign a value to each “piece” of real property, based upon the respective property’s market.
Lake County Property Tax Assessment
What is your property worth? This determination is the job of the various Lake County townships’ property tax assessors, who determine the market value of your property. Generally, this is a rather complex process and is often a source of Lake County property owners’ confusion. However, there are three basic approaches that assessors use to determine the value of your property:
- Comparisons to comparable properties: This includes market calculations through recent sales…How much was a comparable home sold for recently in the area? It also includes looking at the township’s assessments of comparable properties in the neighborhood that you are living in. Lake County’s property tax assessors take these factors into account in the determination of your real property’s assessed value, which should be one-third of its market value;
- Cost: This measurement is not determined through comparisons to comparable properties, but rather by determining the cost of reproducing the property you have, and then by subtracting depreciation, given that your property may not be new; and
- Income: This measurement is based upon the income, if any, that you are receiving from the property. For example, if you own a rent-producing piece of property, the assessor will factor the rent into the assessed value. (The income approach is not used in valuing single-family residential properties.)
To determine the tax liability associated with the assessed value of your Lake County property, the Lake County Assessor multiplies the assessed value by two numbers: 1) The tax rate that your county collector determines is needed to produce the amount of revenues that each taxing district may legally levy; and 2) IDOR’s state equalization factor for each county, which is used in order to equalize assessments among counties.
Lake County Property Tax Assessment Review
Now that you have a basic understanding of the Lake County, Illinois property tax system, you are in a better position when you receive the blue assessment notice this summer. If you think that your Lake County township assessor has over-assessed your property, then it might be time to contact a local Lake County property tax appeal firm to confirm your conclusion and then to fight your township’s assessment of your property’s value. No one should be taken advantage of by their local government. If you are interested in Lake County real estate assessment reduction services, please contact Lake County Appeal now at (847) 790-7400 or info@LakeCountyAppeal.com, or you can sign-up for an assessment review at LakeCountyAppeal.com.