Many homeowners in Chicago may experience significant increases in their property tax bills this year, following a triennial reassessment that shifted the city’s tax burden largely onto residential properties.
In 2024, the Cook County Assessor’s Office completed its reassessment of Chicago, revealing a total increase in assessed value of $5.4 billion.
Initially, increases in non-residential and commercial property values outpaced residential properties, causing homeowners’ share of assessed value to fall from 51% to 49%. This shift could have led to a reduction in the tax burden for homeowners.
However, the ultimate authority on property tax valuations lies with the Cook County Board of Review, which decided on modifications to assessments following appeals.
This year, the Board of Review took a substantial step by reducing commercial property values in Chicago by 17%, translating to a cut of $4.3 billion in assessed value.
Conversely, residential property values were reduced only modestly by 1%, or $0.4 billion. As a direct consequence of these commercial cuts, the share of assessed value attributed to homeowners surged to 54% from the previous 49%.
The Class 5A properties, comprising primarily office buildings, retail stores, and hotels, saw their total assessed value drop to $14.3 billion, down from $14.4 billion at the start of the reassessment cycle.
The initial 21% increase in Class 5A property values was drastically altered, with the Board of Review making adjustments that accounted for more than $3 billion in value reductions for the properties that contested their assessments.
This phenomenon of shifting tax burdens is not unique to this reassessment cycle. In the 2021 reassessment, residential properties accounted for 53% of Chicago’s citywide assessed value after appeals were finalized, predominantly due to cuts totaling $6.2 billion for commercial properties.
A recent analysis from the Cook County Treasurer’s Office revealed similar trends in suburban areas, indicating that homeowners in Cook County faced nearly $2 billion in added taxes over three years as businesses appealed their assessments successfully.
Here are key statistics reflecting the changes from the Board of Review’s adjustments:
– Under the Cook County Assessor’s Office’s initial valuations, Chicago’s total assessed value could have risen by 22%, or $9 billion.
– Following the Board of Review’s alterations, the tax base actually grew by 11%, amounting to $4.4 billion.
– The most significant cuts for commercial properties occurred in downtown Chicago, particularly in the North, South, and West Chicago townships.
– The Class 5B Industrial properties saw the largest percentage decrease at 22%, while Class 5A Commercial properties faced a 17% reduction.
– In terms of assessed value, the Class 5A commercial sector experienced a reduction of $3.0 billion, with Class 3 Large Multi-Family properties also seeing a $0.6 billion decrease.
– Notably, residential properties’ values set by the Assessor’s Office dipped by 1% across most townships, with exceptions in Lake View and West Chicago, where the decline was slightly more at 2%.
– Before the reassessment, residential properties comprised 51% of the city’s total assessed value, which escalated to 54% following the Board of Review’s deliberations.
A glaring gap remains as no current mechanisms are in place to protect Cook County homeowners from sudden spikes in property taxes.
New data has emerged indicating that about 240,000 households in Cook County have incurred tax bill increases of 25% or more in a single year, significantly impacting numerous neighborhoods in Chicago.
For instance, nearly 2,700 households in the 35th Ward faced an additional tax burden of almost $8 million due to these sudden increases.
In response to the pressing need for relief, the Cook County Assessor’s Office has collaborated on legislative efforts to create a property tax relief initiative aimed at homeowners.
The proposed ‘circuit breaker’ program would assist qualifying homeowners facing 25% or greater tax bill increases, offering credits that would cover up to 50% of the tax bill rise.
The Circuit Breaker Property Tax Relief Act has been introduced in the Illinois Senate as SB1978 and in the House as HB3808, championed by Sen. Patrick Joyce and Rep. Justin Slaughter, respectively.
As the 2024 assessment cycle concludes, Illinois residents continue to face significant challenges regarding property taxes, highlighting the necessity for effective reform and homeowner protection.
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