Publications

Property Taxes

“Taxation without representation is tyranny.”
Patrick Henry

Published June 21, 2003 as
Understanding how local taxes are assessed

Those are apt words, although in these times some might say our taxation is tyranny, even with representation.

Here are some of the basic facts about real estate taxes in the State of Illinois:

All of our taxing bodies/units of local government are supported by property taxes.
Illinois has more units of local government per capita than any other state in the Union. (Only in Illinois can you find one medium size village in two counties, six school districts, two library districts, etc.) Each taxing body takes a piece of the pie and it is the most expensive dessert you will ever eat!
If you look at the breakdown, 60 to 80 percent of the bill goes to local school districts.
Paying your taxes “under protest” should not be confused with seeking a reduction and does absolutely no good unless you file a lawsuit to challenge the tax levy of one or more of the taxing bodies alleging their levy was illegal and being able to prove it.
There should be no significant taxes on any common area or real property owned by an association, since those parcels, by law, are to be assessed at $1.00 per year (Section 10(a), Illinois Condominium Property Act, 765 ILCS 605/10 and Section 10-35 of the Property Tax Code). If your association is paying taxes on common areas, petitions should be filed by legal counsel to apply for the statutory assessed value as soon as possible as well as an application for refund of the past several years. The main requirement is that the property has been turned over by the developer and the parcel has been conveyed to the association.
Section 10(e) of the Illinois Condominium Property Act allows 2/3rds of the board of directors of a condominium to hire an attorney to seek a reduction of the assessment or levy of taxes and charge the expenses and fees back as a common expense.

For taxes on residences located in an association, the best results will be obtained if (a) the reduction process commences as soon as the tax bills have been divided on new construction, (b) is reinstituted every three years when the property is reassessed (triennial reassessment) and (c) is handled by the association as a whole, rather than on an individual basis. Sometimes the results are significant. In order to seek relief, the following steps must be followed:

If the property is over-assessed, your attorney can file an appeal directly with the appropriate Assessor or County Board of Review. However, outside Cook County, an association can first meet with the Township Assessor who has the authority to make an adjustment, if warranted.
Within 30 days of the publication of the proposed assessment or the mailing or the notice of proposed assessed valuation by the Assessor, a tax complaint can be filed with the County Board of Review.
- (a) A written complaint is filed with evidence supporting the argument for a reduction.
- (b) The most common basis for a reduction is lack of fairness or uniformity relative to like properties in the immediate vicinity or excessive market value.
- (c) Different types of documentation can be presented to support your case.
If the application is denied in Cook County, an appeal can be filed with the Cook County Board of Review. In other counties, an appeal can be filed with the Illinois Property Tax Appeal Board or a complaint can be filed in the Circuit Court.
Any appeal must be filed within 30 days after a notice of the decision is issued.

Not surprisingly, a significant number of associations follow this regimen and successfully reduce individual tax bills by hundreds of dollars per year. If a board of directors does not actively pursue real estate tax relief (although I do not know why they would not), Section 10(c) of the Illinois Condominium Property Act allows a majority of owners present at a special meeting of members to vote to seek tax relief.

In conclusion, it is important for a board of directors to keep its members informed of their rights and to act in the best interests of the owners. Having the members pay less real estate taxes would certainly fall within those guidelines.

Remember, even though nothing is certain except “death and taxes,” it is far easier to pay less real estate taxes than to hold off the “grim reaper” when he appears on your doorstep.