How New Tax Cap Affects You Measure Not Likely to Trim Your Property Taxes Much
Krol, Eric, Daily Herald (Arlington Heights, IL)
Byline: Eric Krol Daily Herald Political Writer
New legislation aimed at curbing runaway property tax assessment increases in Chicago will force suburban county boards to make a key decision by the end of the year that will help determine whose property tax bills go up or down, and by how much.
Gov. Rod Blagojevich has pledged to sign into law a measure pushed through the General Assembly by Cook County Assessor James Houlihan that caps property tax assessment increases for homeowners at 7 percent a year.
That means county board leaders in DuPage, Lake, Kane, McHenry and Will then will have to choose between adopting Houlihan's 7 percent assessment cap or taking no action, which triggers a provision that increases the homestead exemption from $3,500 to $5,000 a year.
The county board chairmen each have dispatched their property tax experts to crunch the numbers so they'll be able to make an informed decision.
A Daily Herald analysis of the legislation's impact shows that under either option, unless a homeowner lives in a rapidly improving neighborhood or in a high-demand town where a lot of houses are changing hands and driving up home values, the legislation isn't going to save the homeowner much money.
But there are winners and losers under each option. Here's a primer on the new tax measure, based on interviews with chief tax assessors in DuPage and Lake counties, the Taxpayers' Federation of Illinois and Houlihan's office:
- The 7 percent option: Chicago homeowners in gentrifying areas were hit with increases in their assessments - how much the tax man values their house for property tax purposes - of 50 percent or more over three years.
Houlihan's measure caps the assessment increase at 7 percent a year, or 21 percent over three years, since houses are reassessed every three years in Cook.
But homeowners who live in more expensive houses won't get to take full advantage of the 7 percent cap - the benefit is capped at $20,000 of value.
Also, if your home doesn't increase by 7 percent a year, you're still entitled to the homestead exemption increase that jumps from $3,500 to $5,000 a year.
- Should suburban county boards opt against the 7 percent assessment cap, the standard homestead exemption for homeowners would increase from $3,500 to $5,000. In Cook, the exemption would increase from $4,500 to $5,000, but only for homes that don't increase in value by more than 7 percent a year. That's because County Board President John Stroger backs the 7 percent cap.
- What kind of savings will there be?
Tax experts warn that savings will vary depending on which town you live in, how much your home is worth and whether your tax rate is going up due to referendum proposals being approved.
But based on the 7 percent assessment cap, a small group of homeowners would save $300 to $1,500 assuming their home values were increasing at a rate of 10 percent a year.
While those figures apply mostly to Cook homes, there are hot real estate markets in DuPage (Downers Grove and Bloomingdale townships) and Lake County (Fremont, Libertyville, Antioch townships) where home values are increasing by up to 10 percent this year. …