How Illinois Property Taxes are Calculated
Chicago attorneys help ward off excessive assessments
Illinois property taxes are based on a multi-step formula based on an assessors’ valuations. Because the process involves several variables at different government levels, there can be errors and inconsistencies. If you suspect your property tax bill is higher than is justified, the attorneys at Rieff Schramm Kanter & Guttman LLC in Chicago can help you respond to erroneous assessments timely and effectively.
Key components of the calculation
The property tax calculation begins with the assessed value, which is the county assessor’s estimate of a property’s fair market value multiplied by an assessment ratio established by state law. That assessed value is adjusted by the state equalization factor, resulting in the property’s equalized assessed value (EAV). This is the taxable value used statewide with the intent to ensure uniformity among counties.
Qualifying property owners can apply exemptions to reduce the EAV. After exemptions are subtracted, the remaining taxable EAV is multiplied by the local tax rate, producing the annual property tax bill.
How assessment cycles work
Assessment cycles vary by county. Cook County applies a triennial cycle, with properties in each township reassessed once every three years. Residential, commercial and industrial properties are all subject to this schedule. In most other Illinois counties, assessments occur annually or on a multi-year cycle, with trending adjustments in non-reassessment years.
Because reassessments reset a property’s estimated market value, they often result in noticeable changes to tax bills, even when tax rates remain stable.
How tax rates are set by taxing districts
Property tax rates are determined after assessments are finalized. Local taxing districts — such as school districts, municipalities, counties, park districts and libraries — adopt annual budgets and request a specific amount of tax revenue, known as a levy. The total levy is divided by the combined taxable EAV of all properties within the district to produce the tax rate. As a result, tax rates can rise even if property values remain flat, particularly when levies increase or the overall tax base declines.
How reassessments and levy increases impact tax bills
A reassessment does not automatically increase taxes across the board. Instead, it redistributes the tax burden among property owners based on changes in relative value. A property whose value increases faster than comparable properties can see a higher tax bill, while others might see reductions. Similarly, levy increases by taxing districts can raise tax bills even when assessments remain unchanged. Property owners often experience reassessment-driven valuation changes and higher levies in the same tax year.
Distinctions between residential and commercial properties
Illinois law treats residential and commercial properties differently. Cook County applies distinct classification systems and assessment methodologies that often result in higher tax burdens for commercial and industrial properties. Outside Cook County, most counties apply a uniform assessment ratio, reducing disparities between classifications. Understanding county-specific rules is essential when evaluating whether a property has been over assessed or misclassified.
How errors create opportunities for appeals or corrections
Errors in valuation, property classification, square footage, occupancy status or exemption application can significantly affect the final tax amount. Even small inaccuracies can have a compounding effect once equalization factors and tax rates are applied. These issues often create opportunities for assessment appeals, exemption corrections or refunds. Our skilled attorneys conduct reviews of assessments and tax bills to identify mistakes. We challenge improper valuations and pursue relief through the assessor, Board of Review or higher appeal bodies as needed.
Contact a respected Chicago law firm to discuss property tax calculations
Rieff Schramm Kanter & Guttman LLC in Chicago provides meticulous and trustworthy reviews of property tax calculations and assistance in seeking tax relief. To schedule a free consultation, call 331-310-0855 or contact our office online.
