By: Dana A. Pointer, CSU Intern
 Courtesy of Curbed.com
As a child, most of us strive to achieve the American Dream and one thing that completes that dream is owning your own home or opening a business. People work hard to achieve these goals, but when it is time to start this search, you must first learn some basics about a volatile subject; property taxes.
Across the United States, the topic of property taxes is discussed, but truly understanding the process is another story. In the state of Illinois, the average effective property tax rate is 2.32 percent, making it the second-highest in the United States. This topic has lost and won elections for many, but still many homeowners do not know their rights.
There are a few departments that you need to be familiar with if you are purchasing property in Cook County; the Cook County Recorder of Deeds, Clerk, Treasurer, Assessor’s Office, Board of Review and the Property Tax Appeal Board. Navigating this department can seem overwhelming and time-consuming but having some knowledgebase can save you time and money.
“For the first year after the purchase, the buyer will hold all the exemptions of the seller. Then BOOM, the beginning of the next tax cycle begins, and all exemptions are removed, and the full tax burden is revealed.”
When you are about to close on the house of your dreams, one of the first questions you should ask the buyer is, what exemptions they have on the property. The calculation of your mortgage includes your property taxes and can be the major deciding factor on whether you can afford that home. For example, if you are purchasing a home from a senior citizen, who is on a fixed income, they are given additional savings that may not apply to you. Upon purchase, your mortgage company will calculate the amount including their savings, which results in an artificially low mortgage.
For the first year after the purchase, the buyer will hold all the exemptions of the seller. Then BOOM, the beginning of the next tax cycle begins, and all exemptions are removed, and the full tax burden is revealed. You will then receive a letter from your mortgage company stating that there is not enough money in your escrow and your monthly mortgage will increase. The increase can be in the hundreds or even thousands, depending on the exemptions and location of the property. This is one of the main reasons homeowners go into foreclosure and lose their homes. This is a simple question that can be asked before you close, to avoid a hardship later down the road.
If the realtor or attorney claims they do not have this information, you can do the research on your own. These exemptions and many other details about the property are public records. Visit the Cook County Assessor’s website (www.cookcountyassessor.com) to check the property’s exemption status. All you need is the address of the property or the property index number (PIN), which can be found within the closing contract or on the Assessor’s website.
If you decide to continue with the purchase of the house, remember that one year after purchase, you must apply for the exemptions that you qualify for. Some of the most beneficial exemptions offered by the Cook County Assessor’s Office include;
1: Homeowners Exemption- an exemption given to the owner of a residential property. This MUST be your primary residence.
2: Senior Citizen Freeze- the owner must be 65 years of age and the household income MUST be no greater than $65,000.
3: Disabled Veterans Exemption- the owner must be a Veteran, with a service-related disability. They must provide a verification letter from the U.S. Department of Veterans Affairs to support this claim.
A full description of these exemptions and many more are available at the Assessor’s Office or their website. A homeowner can have up to four exemptions on their property at one time. If you have more detailed questions, the Assessor’s Office has a few locations across Cook County, including their main office, located in City Hall in downtown Chicago.
Stay tuned for Part II of this series that will cover the appeal process and your rights as a property owner in Cook County.
-And remember,
Stay informed, open-minded and driven.
The Drive Student Blog| Informed, Open-minded, Driven 