Property Taxes on a Single Family home

[Victor Munoz]

Hi Everyone,

Hope everyone is doing well. My name is Victor and I live in Buffalo Grove IL. I’m considering purchasing a single-family property that’s below market value due to disrepairs.  This will be a home I plan to move into. The property taxes are around the same as properties that are priced at market value. Does anyone know why this would be and is there any way to bring the taxes down to reflect the value of the property? The property I’m interested in is about $275k and similar size properties in the area are going for about 500K.

I’m new to this site and I appreciate any comments anyone might have.

Thank you,

[Jody Sperling]

You can file a protest with the county board of equalization on the tax assessed value (it might have a different name in Illinois, but that's what it's called in Nebraska). The problem you'll likely face, though, is that by the time they check the property value, you'll already have begun improvements. If the deal is good enough, don't let a bad tax assessment stop you from taking the leap! Best of luck.

[Corby Goade]

I don't have a specific answer for you, I don't know your market. That said, every state and county calculates their taxes in totally different ways. Some are taxed based on the sales price, some are taxes based on a random property value that the county assigns. Your realtor should be able to explain the way the properties are taxes in that area and give you an idea of how to plan for where taxes will go once you close. 

Congrats and good luck!

[George Skidis]

In Illinois the Owner can file a real estate tax appeal at the courthouse. If the purchase is an "Arms length transaction", the purchase contract might be enough evidence to win the appeal. Frequently short sales are denied this opportunity. Most tax appeals must be filed no earlier than August and no later that Sept or Oct. If not submitted in the right time frame they cannot be submitted until the next window of opportunity. 

Homestead, Veterans and Senior exemptions must be on file no later than January to be eligible in that year. Veteran and Senior exemptions must be filed annually to be received.

 The reason for it's current value on the tax role could be one of any number of things:

My experience is mostly Saint Clair and Madison Counties in Illinois.

1. A percentage of the properties in a county are inspected every year. This means that most properties are seen about once every 4 years by the assessors office. If they can't see any issues from the outside the assessed value can remain the same but frequently they are increased.

2. The previous owner has never appealed the taxes.

3. The property is shown as demised, but has lost the owner occupied exemption.

4. The regional county multiplier is sky high and nobody cares.

5. The county knows there is a problem, but to keep the tax roles fat they took no action since none was initiated.

6. The current owner has appealed the taxes but no filed the paperwork to receive the Homestead exemption.

7. Something else went wrong. You ARE dealing with the government after all.

[Jonathan Klemm]

@Victor Munoz - Welcome to the Chicago BP community!  Probably because no one has ever appealed the taxes before would be by guess.

Are you planning on keeping this as a rental or flipping it?

Is the property you are purchasing also in Buffalo Grove?

[Forrest Williams]

Hi Victor, you can check the tax records by googling your county + property taxes. There you can see if it has been appealed recently. There are tax attorney specialists for property taxes that may be able to help you file an appeal. Since you'll be living there, you'll also receive a homeowner's exemption so that'll help the tax situation too.

I got started by house hacking, it's the best way to do real estate in my opinion. You're on the right track!

[Bob Stevens]

@Victor Munoz when you buy for much lower they will lower the taxes accordingly 

[John Warren]

@Victor Munoz property taxes in the suburbs are one of the most important things to understand. Just because the house has fallen into disrepair doesn't mean the taxing bodies know about it. The appeals process is unlikely to go quickly and you will most likely get some relief in a year or two. At the same time, I would recommend running your numbers as though the taxes never go down. I purchased a six unit in Cicero that was an arms length transaction significantly below the assessed value. I am two years in and I have yet to see a reduction sadly. 

[Michael K.]

Originally posted by @Victor Munoz:

Hi Everyone,

Hope everyone is doing well. My name is Victor and I live in Buffalo Grove IL. I’m considering purchasing a single-family property that’s below market value due to disrepairs.  This will be a home I plan to move into. The property taxes are around the same as properties that are priced at market value. Does anyone know why this would be and is there any way to bring the taxes down to reflect the value of the property? The property I’m interested in is about $275k and similar size properties in the area are going for about 500K.

I’m new to this site and I appreciate any comments anyone might have.

Thank you,

Victor congrats on starting the search for your first home. A couple of things, #1 Contest the tax assessment and you can probably get some discount #2 property taxes are more closely related to the neighborhood than to the actual condition of a home. Assessors don't know what a house looks like on the inside. Two houses on the same street may appear the same on the exterior but on the interior one might have had every room remodeled while the other house never had any work done to it and looks the same it did in the 1980's. #3 In cook county property taxes are reassessed every 3 years. If during that time the property sells at a higher price (because it was renovated, market improved etc) then the tax assessor will have that data and it will be reflected in your tax assessment.

Did you end up buying ht property? How's it going?