Valuation by the Assessor
The Assessor is tasked with determining a fair cash value (market value) for each unit.
Market value is described as the most likely price a property would fetch in a competitive and open market with all the necessary conditions for a fair sale, where both the buyer and seller act prudently and knowledgeably, assuming that the price is not influenced by any undue factors.
The Assessor will determine a market value for the entire condominium by utilizing sales data, statistical analysis, and other factors influencing market conditions. Once the total market value of the condominium is established, the Assessor will allocate a value to each individual P.I.N. based on the ownership percentages outlined in the condominium’s declarations. According to the assessment standards in Cook County, Illinois, each parcel will be appraised at 10% of the designated market value. During the initial year of a triennial reassessment, the Assessor will set an assessment that will remain unchanged for the subsequent three years. While the Assessor has the authority to reassess properties annually with proper notification, it has been customary for the Assessor of Cook County not to adjust assessments during a triennial period unless additional appeals succeed in persuading the office to reduce the original assessment.
It is preferable to file a joint appeal
Filing a joint appeal through the Association Board on behalf of all condominium owners is the most efficient method for appealing the valuation of any condominium building(s). There are three key benefits to filing a joint appeal: (1) market influences impacting the value of a single condominium unit will likely impact other units similarly; (2) the ownership percentage allocated to each unit significantly influences its valuation; and (3) the Association or Board is typically best positioned to access pertinent sales data.
The most reliable measure of worth, and the one the Assessor depends on the most, is the recent sales of units within the condominium. These sales set a benchmark for assessing whether any units exceed or fall below the 10% threshold set for residential property.
Current Assessment/Sale Price = Sales ratio
If properties are being sold for less than the values determined by the Assessor, their assessment to sales ratio (AV/SP) would exceed 10%. A ratio exceeding 10% could suggest an overvaluation in light of the recent sale and could serve as grounds for an appeal. Conversely, if properties are selling for more than the values set by the Assessor, their assessment to sales ratio (AV/SP) would be below 10%. A ratio below 10% might indicate an undervaluation based on the recent sale and would not be advantageous for filing an appeal.
External factors impacting future evaluations
The Responsibility of Financing the Government
Determining real property taxes in advance of the Assessor proposing assessment values, the State of Illinois Multiplier for Cook County, or the local taxing district’s individual levies lacks a precise metric. Schools and municipalities heavily depend on the property tax system to secure sufficient revenue for their operations and enhancements. Market conditions and the government’s need for increased revenue impact the assessment process. For instance, the City of Chicago’s property tax levy surged by almost double, reaching $1.6 billion from 2012 to 2021.
Multiplier in the State of Illinois
Even though the local ordinance sets the assessment level at ten percent of fair cash value, Illinois statutes mandate that all properties in Illinois must be assessed at 33.33% of fair cash value. This is why a “multiplier” is utilized to adjust the assessment of your property. If the total value of properties in your county falls below a certain statistical benchmark determined by sales data collected by the Assessor and the Illinois Department of Revenue over the previous three years, your assessment will be increased annually by a factor to bring the county’s overall assessments in line with Illinois statutes. This process ensures that your assessment is “equalized” once the adjustments are made. Details of the assessment and multiplier can always be found on your second installment real estate tax bill.
The State’s equalization factor (multiplier) will always exceed one.
In Cook County, residential property is assessed at 10% of fair cash value (market value) while commercial/industrial properties are assessed at 25%. The State of Illinois Department of Revenue is responsible for determining whether a multiplier should be applied across the county regardless of its locality. According to the law, the equalization factor does not affect farm acreage, farm buildings, wind energy, state-assessed properties, or coal rights, as these properties are assessed using different methods outlined in Illinois statutes. The Illinois constitution mandates that all real property taxes must be levied uniformly. Equalization guarantees that real property is assessed collectively at 33 1/3% of its market value as stipulated by law.
The processes of appeals
Cook County has 38 townships, divided into three assessment areas (North, South, and City of Chicago). Throughout the year, taxpayers receive notices if their assessments are altered, allowing them 30 days to lodge a complaint. If a decision is made to alter or retain an assessment, the taxpayer can appeal to the Board of Review.
The following information normally accompanies each joint condominium valuation appeal:
a) A copy of the original declaration of condominium ownership with all subsequent
amendments;
b) A list of all unit numbers, and the corresponding permanent index numbers, which are
subject to the terms of the declaration. This includes all property owned by the Association
or Board, including recreational, parking, or other facilities, whether adjacent or not;
c) A description of the size of each unit, the unit blends of the building(s) and the percentage of ownership of each unit;
d) Interior and exterior photographs of the building(s);
e) The closing statements for all units which have been sold within the last five years;
f) Actual construction or renovation cost information if the building(s) has been constructed, converted, or renovated within the last three years; and g) Three years of financial statements if the building(s) has been constructed, converted, or renovated with the last three years.
Board of Review
The Board of Review members are chosen by the public, with one representative elected from each of the three districts set up by the Illinois Legislature in 1996. Every year, the Board reviews appeals from taxpayers, regardless of whether they initially filed at the Assessor’s office or directly with the Board. The deadline for submitting an appeal is published on the Board’s website and changes annually. It is important to highlight that this Board of Review holds significantly more authority than the former Board of (Tax) Appeals to independently increase an assessment.
The Property Tax Appeal Board
Following a ruling by the Board of Review, individuals have the option to appeal to the Illinois Property Tax Appeal Board (PTAB). The PTAB reevaluates valuation complaints and holds the authority to adjust assessments within its jurisdiction, either increasing or decreasing them. If a taxpayer remains unsatisfied with the PTAB’s decision, they are deemed to have exhausted all administrative remedies and can further appeal to the Circuit Court under the administrative review act. During this appeal process, the court will assess whether the PTAB’s decision was supported by substantial evidence. Resolving matters brought before the PTAB can be time-consuming, often resulting in a litigation period lasting between three to five years.
Lawsuit with particular objections
On the other hand, if you disagree with the decision made by the Board of Review, you can file an appeal to the Circuit Court. A Judge will assess all factual and legal aspects of the case, and there is no option for a trial by jury. Similarly to other civil cases, you can appeal the final ruling of the Court. It is advisable to provide an appraisal supporting a lower value than the one proposed by the Assessor/Board of Review when appealing to the Circuit Court. Just like with the PTAB, cases brought before the Circuit Court typically take three to five years to be resolved.
In Summary
Effectively challenging assessments at the Assessor and Board of Review levels is crucial to altering a proposed assessment before real estate tax bills are issued. The goal is to ensure that any assessment determined by the Assessor does not exceed 10% of the purchase price, adjusted for any personal property included in the sale of the unit.
The key challenge in contesting proposed assessments and external influences is to align the final assessment with that of other property owners who own similar properties.
By striving to maintain a low proposed assessment, property owners can alleviate the burden of real estate taxes during reassessment cycles.
