State RepresentativeRon Sandack

Presents

Property Taxes in DuPage: Understanding the Assessment Process

Overview of the Property Tax System – DuPage County

Illinois Property Tax – Ancient History

• 1818 – 1932: State Levied a Centralized Property Tax

(on Personal Property and Real Estate)

• 1933: Property Taxes Levied, Collected and Spent at the Local Level

• 1939: Revenue Act of 1939 Enacted

(Foundation of current Real Property Tax Code)

• 1970: Illinois Constitution Amended to Eliminate Tax on Personal Property

by 1979 (Non-Real Estate)

Recent History(Tax Year Affected Referenced)

• 1972: General Assembly Enacts Senior Homestead Exemption

• 1978: General Assembly Enacts General (Residential) Homestead

• 1991: Property Tax Extension Limitation Law (PTELL) Enacted

• 1994: Senior Assessment Freeze Enacted (DuPage Initiative)

• 2007: Three New Homestead Exemptions Enacted

DuPage Property Tax SystemBy the Numbers

Variable 2011 pay 2012 Tax Year

Parcels of Real Estate: 334,889

Residential Homestead Exemptions Granted: 270,834

Senior Exemptions Granted: 49,664

Senior Assessment Freeze Exemptions Granted: 14,670

Total Assessed Value (Net Taxable After Exemptions): 37,694,225,826

Tax Districts/Units of Government Receiving Tax: 382

Tax Collected: $2,493,604,956

What Determines My Property Tax Amount?

(1) Assessed Value

(2) Exemptions

(3) Tax Levy (Rate)

Tax Bill

Subtract if any

Multiply by

Equals

(1) Assessed Value

• Is an estimate of value of the property initially calculated by the local

township assessor.

• Is based upon statistical data from actual property sales and

property physical characteristics of record.

• The assessment is required to represent one-third of the property’s

fair market value as measured from the three prior years’ sales

activity.

• Independent from the local assessment offices, the Illinois

Department of Revenue annually compiles statistics comparing

actual sales and assessed values to monitor the accuracy of

assessed values.

1

Assessment Cycle

By January 1st (County Clerk): List of Taxable Property Prepared

By November 15th (Township Assessor): Property is Valued as of 01/01

(Supervisor of Assessments): Calculates Equalization Factor*, Mails Change of Assessment Notice*, Publishes Assessment Changes

Note: Appeal Deadline is 30 Days After Assessment Publication

(Illinois Department of Revenue): Calculates Tentative State Equalization Factor

(Board of Review): Holds Assessment Hearings, Calculates Board Equalization Factor*

(Illinois Department of Revenue): Calculates Final State Equalization Factor

Assessed Values Certified to County Clerk in March of Following Year

* If Required

Quality Control – Oversight

• Illinois Law recognizes the need for an objective method to measure the accuracy and quality of locally produced assessed values.

• To that end, the Illinois Department of Revenue is charged with the responsibility to monitor the performance of local assessment officials on an annual basis.

Excerpt from Real Estate Transfer Declaration

Form Instructions

Annual Sale to Assessment Ratio Study

• As required by State Law, the ratio studies are complied independently by the Illinois Department of Revenue on an annual basis.

• The studies are a statistical comparison of actual sales prices and their corresponding assessed values.

• All property sales are analyzed.

• Only sales occurring under normal circumstances are included in the study:– Arms-length transactions – Neither party under duress– Reasonable exposure to the market

• Reports are used by the State to:– Verify compliance to statutory level of assessment– Calculate equalization factors if assessed values are not at statutory level of assessment – Test accuracy of locally produced assessed values– Measure quality (uniformity) of assessed values

Definition: 33 1/3% (Level of Assessment)

(35 ILCS 200/1-55)

Sec. 1-55. 33 1/3%. One-third of the fair cash value of property, as determined by the Department's sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for the studies were collected.

(Source: P.A. 86-1481; 87-877; 88-455.)

Implications of 3-Year Averaging: Appreciating Real Estate Market

• Action: The assessments are calculated from

sales occurring when prices were typically lower.

• Result: Assessed values lag behind current

market values.

Example: Final 2006Actual Sale to Assessment Ratio Study Results as Certified by the Illinois Department of Revenue

Township Adj. 2003 Median Adj. 2004 Adj. 20053-Year Ave.

Addison 34.79% 34.60% 30.66% 33.35%

Bloomingdale 34.62% 34.13% 31.24% 33.33%

Downers Grove 35.11% 34.09% 30.41% 33.20%

Lisle 34.78% 33.88% 31.11% 33.26%

Milton 35.17% 33.46% 31.10% 33.24%

Naperville 34.74% 33.85% 31.41% 33.33%

Wayne 34.36% 33.85% 31.56% 33.26%

Winfield 35.17% 33.93% 31.32% 33.47%

York 34.95% 34.48% 30.18% 33.20%

Source: Illinois Department of Revenue, GREEN = Single-Year Below 33.33%, RED = Single-Year Above 33.33%.

Implications of 3-Year Averaging: Depreciating Real Estate Market

• Action: The assessments are calculated from sales

occurring when prices were typically higher.

• Result: Assessed values are above current market

values.

Example: Final 2010

Adj. 2007 Adj. 2008 Adj. 2009 3-Year Ave.

Addison 28.89% 31.40% 38.50% 32.93%

Bloomingdale 30.47% 32.58% 36.95% 33.33%

Downers Grove 30.75% 32.68% 36.57% 33.33%

Lisle 31.36% 32.71% 35.92% 33.33%

Milton 31.33% 32.96% 35.70% 33.33%

Naperville 31.40% 32.82% 35.77% 33.33%

Wayne 30.84% 32.95% 36.19% 33.33%

Winfield 30.64% 32.90% 36.45% 33.33%

York 30.79% 32.76% 36.43% 33.33%

Source: Illinois Department of Revenue, PTAX-215, Dated 03/08/2011

Property Value Trends

Source: Standard & Poor’s Case-Shiller© Chicago Area Home Price Index (as of January for each year)

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

60

80

100

120

140

160

180

Single Year Data

Current

Year

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Comparison of Current Value and 3-Year Average

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

60

80

100

120

140

160

180

Single Year v. 3-Year Average

Current

3-Year

Year

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Comparison of Current Value and 3-Year Average 2006 vs. 2010

2006 Assessment Year

Median 2006 Sale to

2006 Assessment Ratio

was 28.43%

2010 Assessment Year

Median 2010 Sale to

2010 Assessment Ratio is

38.10% Source: Illinois Department of Revenue

2006 2007 2008 2009 2010 2011

115

125

135

145

155

165

175

Single Year v. 3-Year Average: 2006 - 2011

Cur-rent3-Year

Year

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What About This Year?(Prior to any Changes for 2012)

Adj. 2009 Adj. 2010 Adj. 2011 3-YearLevel

AdjustmentRequired

Addison 33.97% 36.04% 41.23% 37.08% -10.11%

Bloomingdale 33.85% 36.08% 41.58% 37.17% -10.33%

Downers Grove 34.19% 35.32% 38.38% 35.96% -7.31%

Lisle 33.92% 34.91% 37.48% 35.44% -5.95%

Milton 33.50% 35.17% 38.12% 35.60% -6.38%

Naperville 33.75% 35.25% 37.87% 35.62% -6.43%

Wayne 33.67% 35.10% 39.41% 36.06% -7.57%

Winfield 33.68% 36.05% 40.77% 36.83% -9.50%

York 33.47% 35.11% 39.98% 36.19% -7.90%

Global Assessment Changes ≠ Bill Changes

• Action: All assessed values within your township are reduced by 10%.

• Result: Assuming all other variables do not change, property tax bill amounts remain constant.

Individual Assessment Change = Bill Change

• Action: My assessed value is increased by 10% while all of my neighbors assessments remained the same.

• Result: My proportionate share of the total tax burden (my bill) will increase when compared to my neighbors.

How Do I Appeal My Assessment?

Informal Appeal: Contact your township assessor

• Timeframe: The sooner, the better

• Process: Provide documentation of concern

– Fair Cash Value: Sales data of subject property and/or comparable properties,

appraisal

– Equity of Assessed Value: Analysis of subject property’s assessment and

comparable properties

• Note: The township assessor is empowered to alter the

assessment on your behalf without you filing a formal appeal.

How Do I Appeal My Assessment? - Continued

1st Formal Step: County Board of Review

• Timeframe: As soon as the assessment is officially set by township assessor. (townships by statute must complete their re-evaluation on or before 11/15/2013)

• Process: File a timely assessment appeal form including appropriate value and/or assessment documentation .

• Please see Board of Review Rules of procedural information.

(available on www.DuPageCo.org/SOA)

Assessment Appeal Track

Township Assessor(Informal – Not

Required)

County Board of Review

(Formal: Administrative)

Circuit or Appeal Court

(Formal: Civil)

Civil Court Appeal(Formal: Civil)

Illinois Property Tax Appeal Board

(Formal: Administrative)

Administrative Review

(Formal: Administrative)

Grounds for Successful Assessment Appeal

Overvaluation

Unequal Treatment (Equity)

Contention of Law

My Taxes are Too High!

Overvaluation Assessment Appeal

• The assessment implies a fair cash value above the current market value.

“I recently purchased my home for $300,000, yet the assessment translates to fair cash value of $500,000.”

• Appropriate Evidence: Sale price and terms of subject property , comparable sales, appraisal, etc.

Unequal Treatment (Equity) Appeal

• Assessed Value is not reasonable in the context of the value placed upon other similar properties.

“There are 10 nearly identical homes as mine within my subdivision, my house is assessed $50K more that all of

the others.”

• Appropriate Evidence: Equity comparison. Using units of comparison are helpful such as comparing the assessed value per square foot of living area of the subject and comparable homes.

Contention of Law

• Disagreement with the interpretation of a specific portion of the Property Tax Code.

“I own a 50 acre farm and I was denied the preferential agricultural assessment.”

• Appropriate Evidence: Cite relevant statue and explain the applicability to the subject property.

(2) Exemptions

• Reduce the taxable assessed value for

recipients of the exemptions.

• Shift tax liability between taxpayers.

• Typically do not reduce the total amount of

tax collected.

2

What Homestead Exemptions are Available?

Program NameAssessment Deduction

Typical Tax Shift

General (Residential): 6,000 $379

Home Improvement: 25,000 (Max.) $1,579

Returning Veterans’: 5,000 $316

Disabled Veterans’ (Adaptive Housing): 70,000 (Max.) $4,420

Disabled Veterans’ (Standard): 5,000 (Max) $316

Disabled Persons’: 2,000 $126

Senior Homestead: 5,000 $252

Senior Citizens Assessment Freeze: 28,149 (Ave.) $1,778

Note: Homestead Exemptions shift a portion of the recipients property tax burden onto other tax payers.

How Do I Apply?

Exemptions Typically Granted by Township Assessor Automatically

• General (Residential): Assuming your township assessor believes your

home is owner occupied, a formal application may not be required.

• Home Improvement: If your township assessor increases your assessed

value because of a physical change to your owner occupied single family

home, then the assessor will initiate the exemption on your behalf.

• If you have a residential or improvement exemption question, please contact

your township assessor.

How Do I Apply? – Continued

Exemptions Requiring a Formal Application with the Supervisor of Assessments Office:

• Senior Homestead: 65 years-old

• Senior Citizens Assessment Freeze: Household Income of $55,000 or Less

• Disabled Veterans’ (Standard): Service Related Disability (+50%)

• Returning Veterans’: For the year you returned home from active duty and the

following year

• Disabled Persons’: Cannot Participate in any Substantial Gainful Activity

These exemptions are applicable to the applicant’s primary residence only, that is owned by the

applicant, and where the applicant is responsible for the payment of the real estate tax.

(3) Tax Rate

• Calculated by County Clerk• Represents the sum of the legally allowed

revenue requests for the taxing bodies in the subject property’s area spread against the total taxable value

• There are 372 taxing bodies in DuPage County for the 2010 pay 2011 Tax Year

3

3

Taxing Body Budget, Levy and Extension Cycle

(Process Starts in October for Many Districts – Ends in December)

Publishes Tentative Budget

Holds Public Budget Hearing

Passes Budget and Tax Levy

Truth-in-Taxation Publication

If Required, Holds Truth-in-Taxation Hearing

Certifies Levy to County Clerk for Tax Rate CalculationDeadline: Last Tuesday in December

Basic Categories of Tax Districts in DuPage County

• Districts Restricted by the Property Tax Extension

Limitation Law (PTELL) a.k.a. Tax (Extension) Cap

• Districts Not Governed by PTELL

Districts Restricted by Property Tax Extension Limitation Law

• Typically Includes Schools, Non-Home Rule Municipalities, Parks,

Fire Protection, the County, and Townships

• Maximum Tax Rate Set by State Law

• Property Tax Increase Limited by Consumer Price Index

• Adjustments Allowed for New Property, Annexation and Other

Special Circumstances

• Tax Increase May Exceed PTELL Limitation or Maximum Statutory

Rate with Voter Approval

• 184 Districts are Restricted by PTELL in DuPage County

Districts Exempted from PTELL

• Typically Includes Home Rule Municipalities and Special Service Area Districts

• Maximum Tax Rate Not Set By State Law

• Property Tax Increase Not Limited by PTELL

• 188 Districts were not Covered by PTELL for 2010 pay 2011 Bills in

DuPage County

PTELL BackgroundTax (Extension) Cap

• Created to prevent taxing bodies from “balloon levying”• Does not restrict individual tax bill changes • Enacted 10/01/1991 for Collar Counties• Expanded to Cook County on 02/12/1995• May be adopted by referendum in other counties

Prior to PTELL: Average Annual Tax Bill Increase in DuPage County was +13.6% (1985 to 1990 Tax Years)

After PTELL: Average Annual Tax Bill Increase in DuPage County has been +4.9% (1991 to 2010 Tax Years)

Where Does My Money Go?

Chart Provided by County Clerk’s Office

Tax Rate Calculation

District Levy (Tax Revenue Request)

÷ Total (Net Taxable) Assessed Value

= Tax Rate

Tax Rate Calculation Example 1 (2008)

County of DuPage, 2008 pay 2009 Levy

District Levy (Tax Revenue Request) : $66,806,020÷ Total (Net Taxable) Assessed Value: 42,906,884,976

= Tax Rate: 0.001557(or 0.1557 $ per 100)

Source: DuPage County Clerk

Tax Rate Calculation Example 2 (2009)

County of DuPage, 2009 pay 2010 Levy

District Levy (Tax Revenue Request) : $66,634,870÷ Total (Net Taxable) Assessed Value: 42,879,581,802

= Tax Rate: 0.001554(or 0.1554 $ per 100)

(-0.3% Decrease from Prior Year Levy)

Source: DuPage County Clerk

Tax Rate Calculation Example 3 (2010)

County of DuPage, 2010 pay 2011 Levy

District Levy (Tax Revenue Request) : $66,942,567÷ Total (Net Taxable) Assessed Value: 40,351,156,012

= Tax Rate: 0.001659(or 0.1659 $ per 100)

(+0.5% Increase from Prior Year Levy)

Source: DuPage County Clerk

Taxing Districts in DuPageFire Protection: 31

Mosquito: 5

Surface Water: 3

Library: 14

Street Lighting: 1

Special Service Areas: 162

Grade Schools: 30

High Schools: 8

Unit School Districts: 10

Junior Colleges: 3

County: 1

Forest Preserve: 1

Water Commission: 1

Airport Authority: 1

Townships: 9

Township Special Police: 4

Township Mosquito: 1

Municipalities: 39

Parks: 40

Sanitary: 8

Total: 372 Individual Taxing Districts in DuPage County

188 Are Exempted from Property Tax Extension Limitation Law

Important Resources

Township Assessors(Assessed Value Questions, General or Home Improvement Homestead Exemptions)

Addison: (630) 530-8161, www.addisontownship.com

Bloomingdale: (630) 529-6927, www.bloomingdaletownshipassessor.com

Downers Grove: (630) 719-6630, www.DGTAO.com

Lisle: (630) 968-1183, www.lisletownshipassessor.com

Milton: (630) 653-5220, www.miltontownshipassessor.com

Naperville: (630) 355-2444, www.napervilletownship.com

Wayne: (630) 231-8900, www.waynetownshipassessor.com

Winfield: (630) 231-3573, www.winfieldtownship.com

York: (630) 627-3354, www.yorkassessor.com

Important Resources – Continued

County Offices: Property Tax Related County Clerk: (630) 407-5540 http://www.dupageco.org/countyclerk/• Billing Address Change • Download an Individualized Property Tax Distribution Report • Taxing District Boundary/Levy/Tax Rate Information

Supervisor of Assessments: (630) 407-5858, http://www.dupageco.org/SOA• Assessment Appeal Deadline Information, Forms• Download Duplicate Change of Assessment Notices• General Information About Equalization Factors • Senior, Senior Freeze, Disabled Persons’ Homestead Exemptions

Treasurer: (630) 407-5900, http://www.dupageco.org/treasurer/• Apply for the Senior Tax Deferral Program• Check your Property Tax Payment Status• Download a Duplicate Copy of Your Property Tax Bill• Enroll in Monthly Property Tax Prepayment Plan

Important Resources – Continued

State Offices : Property Tax Related

Illinois General Assembly http://www.ilga.gov/• View Illinois Property Tax Code• Review Pending Legislation • Contact your Legislators

Illinois Department of Revenue, Local Government Services, Property Tax Division: (217) 782-3627

http://www.revenue.state.il.us/LocalGovernment/PropertyTax/• State-wide Property Tax Statistics Reports• General Property Tax Related Publications

Property Tax Appeal Board: (217) 782-6076, http://www.state.il.us/agency/ptab/• Provides a Venue to Appeal a Local Board of Review Decision • Appeal Forms and Procedure Information Available for Download on Website • Check Status of a Pending PTAB Hearing

Questions & Answers

Thank You!