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Residential Real Estate Buyers

How Are Property Taxes Calculated in Illinois?

By September 16, 2021August 15th, 2023No Comments

If you own real estate in Illinois, you must pay property taxes. These property taxes are collected by the county and local governments in which that real property is located, and the tax funds are used to pay for many services, including school districts. 

Even if you are already paying property taxes, you may still be unsure how the tax rate is calculated. There is no set property tax rate in Illinois, so every county arrives at a tax amount independently. However, there are general procedures that almost all Illinois counties follow even if the specifics differ. 

From our team at Diamond Real Estate Law, here’s some more information on what to expect with property taxes in Illinois.

The Tax Cycle

In most Illinois jurisdictions, property taxes are based on a two-year cycle. In the first year, the property is assigned a value as determined on January 1 of that year. In the second year, a new assessment is performed which may adjust the tax amount. 

After the assessment is completed by county assessment officers, there is a review by the County Board of Review. This board will audit the assessments to ensure they were performed accurately, adjust and equalize assessments across a county, assess omitted properties and grant exceptions. If you feel that your property was assessed inaccurately, then you may appeal to the County Board of Review. 

The state will then equalize assessments across the state by issuing a state equalization factor to each county. Each county then determines the amount in taxes it needs to collect, holds public hearings and certifies tax levies to the county clerk. 

Finally, the county collector issues tax bills and collects taxes from property owners. The county collector then distributes tax revenue to the local governments.

How Illinois Property Is Assessed

Almost all of the real estate in Illinois is assessed on the basis of market value. In other words, the amount a property would likely sell for in an open and competitive market. County assessors may use one or more of the following methods to calculate market value:

  • Market data—sales data of similar, neighboring properties is used as a benchmark
  • Cost—the amount of money it would cost to rebuild the structure, plus the value of the land and minus the amount of depreciation
  • Income—the amount of income an investor is likely to obtain from the property

Under Illinois law, the assessment is then based on 33.333% of the market value.

Your Tax Bill

Your tax bill is dependent upon the tax rates of all of the taxing districts that have jurisdiction over your property.

This may include:

  • County
  • City
  • Township
  • School district

The tax rates of each district are aggregated together then applied to the assessed value of your property. Therefore, your tax bill may fluctuate based on two factors: your assessed property value and the total tax rate in your locale. 

If you feel that a tax bill is not fair, the best way to fight it is to contest the assessment amount (how much the assessor thinks your home or property is worth). Every year, the assessor publishes notice of the new property values and sends a letter to each property owner notifying them of the assessment. 

If you want to dispute the assessment, you have to do it within 30 days of the publication. If you miss that deadline, you may not be able to appeal your assessment until the following year.

If you think your taxes are too high, the first thing to look at is the assessed value of your home. If you think the value is above what you could sell your home for, you may want to dispute the assessment.

If you are not sure what you could sell your home for, asking a local Realtor for a market analysis is a great first step. Many Realtors will provide this service for free or a low fee.

Contact Diamond Real Estate Law

With more than 15 years of leadership experience in the McHenry real estate legal community, Diamond Real Estate Law is here to help you through all real estate transactions and questions. Rely on their peerless guidance and contact Diamond Real Estate Law today for a free consultation.

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