Property Tax Calculations

Once your property has received an assessment value, the Cook County Assessor’s Office will send you a Notice of Proposed Assessed Valuation listing your property’s characteristics, the proposed assessed value and an estimate of your property taxes.

The CCA does not send you the official tax bill, so much of the information in the Notice is estimated. Review the contents carefully to ensure that the description and assessed value of your property are correct. If you detect any errors, file an appeal immediately. (See Appeals.)

While reviewing the Notice, terms to remember include:

• Estimated Property Value: This is the CCA's calculation of your property’s worth, based on sales of similar properties in the area since the last reassessment.
• Estimated State Equalizer: The figure CCA estimates the Illinois Department of Revenue will use to set the actual State Equalizer, which could be higher or lower. See Tax Cycle for more information.
• Estimated Tax Rate: An estimate of what the tax rate of each property’s tax code will be for the following tax year.

Property taxes are determined by two primary factors. The first factor is the amount of money needed by the various taxing bodies (i.e. school districts, city and county taxes, fire departments, park districts, etc.). Once the assessments for a particular area are completed, these taxing bodies request money -- funds known as a levy.

The Cook County Clerk's Office uses the levy to calculate the tax rate, which in turn is used to determine your portion of the taxes. The geographic area where your property is located is categorized and given a tax code. Each and every property in a specific tax code (which can be several blocks or a few square miles) is taxed at the same rate.

The second primary factor determining your property tax bill is the assessment base, or the number of taxable properties in a tax code. To determine the tax rate for your property, the Clerk's Office takes divides the levy by the assessment base. This percentage then becomes the rate at which you are taxed.

The primary issue to remember about tax rates is that they are affected by the spending patterns of the various taxing bodies. The more money needed by the park district, the school district, police department and other taxing bodies, the higher your property taxes.

Below are two examples of property tax calculations for different types of properties, and the ways exemptions may affect your taxes:

Residential Calculation
$100,000 Estimated Property Value
X .16 Assessment Level (16%)
$16,000 Assessed Valuation
x 2 Estimated State Equalization Factor
$32,000 Equalized Assessed Value
- 4,500 Homeowner Exemption
$27,500 Adjusted Equalized Value
x .10 Estimated Tax Rate
$2,750 Estimated Tax Bill in Dollars

Commercial Calculation
$100,000 Estimated Property Value
X .38 Assessment Level (38% on Commercial Property)
$38,000 Proposed Assessed Valuation
- 2 Estimated State Equalization Factor
$76,000 Equalized Assessed Value
x .10 Estimated Tax Rate
$7,600 Estimated Tax Bill in Dollars

Utilizing the above examples, you would be expected to pay $2,750 in property taxes for the year for the residential property, and $7,600 for the commercial property.

If you renovate your space, the assessed value of the property might change, leading to an increase in your property tax bill. Likewise, a change in zoning designation can affect your property taxes. For example, if you purchase a vacant lot assessed at 22% and zoned manufacturing, and renovate it for commercial use, be prepared for a potential increase. Not only does the building increase the property value, but if the space is now zoned or classified for commercial space, it has an assessment level of 38%.

Simply put, anything you do to your property may affect the assessed value and, by association, the property taxes.

One exception to this rule: Homeowners can make up to $75,000 in property improvements without a property tax increase for at least four years. However, while you might choose not to inform the Cook County Assessor’s Office about renovations, the Chicago Department of Construction and Permits typically notifies CCA when a permit is issued for remodeling or repairs. Don’t be surprised if an assessor arrives during your reassessment cycle to review your improvements.

In some instances, individuals can purchase a vacant lot adjacent to a building they own. Depending on how the vacant lot is zoned, the assessment level could be vastly different from the original property. In these situations, compare the tax costs of keeping the property titles separate versus combining them into one.