whether you're a new Investor or a veteran in Chicago Real estate, this is pretty much everything you need to know about Chicago Multifamily property taxes.

Cook County has an effective rate of 2.10%, almost double the National Average.

How taxes are Calculated: In Cook County, property taxes are Calculated once every 3 years (triennial Reassessments), The Cook County Assessor's Office alternates reassessments between the north and west suburbs, the south and west suburbs, and the City of Chicago. map view. For assessment purposes Multifamily still considered residential and assessed Values will be 10% of the Fair Market Value. The assessed value is then Multiplied by the Equalization factor which is 3.2234. then the equalized assessed value will be multiplied by the assigned tax rate for the Municipality/Property. Let us look at a deal we are working on

Fair Market Value: $3.5 MM

Assessed Value: $350K or 10% of the FMV

Equalization factor: 3.2234

Equalized Assessed Value: $350,000 X 3.2234 = $1.128MM

Tax rate :6.911%

Property Tax bill: EAV X Tax rate = $1.128MM X 6.911% = $77,969.

Underwriting Property Taxes: some of the Investors I have spoken to underwrite their property taxes to increase 10-20% every year after the Acquisition and still ended up paying much higher, to an extent of 50-100% Increase post Acquisition or during the hold period. One of the reasons for this is that most of the Properties have been significantly under-assessed compared to their Fair Market Value. As new assessments take place and because there is no cap on Increases it's highly likely that these assessed values will catch up with the Fair Market values so prepare to expect a higher property tax bill. The way we underwrite property taxes for our new acquisitions is we underwrite property taxes assessed to the Purchase price. You will see the same in the above example. There is no way that Assessor is going to assess the values over the Fair Market Value, even if they do, we can make a credible dispute and appeal the taxes. Because underwriting higher projected taxes, only a few deals pencil out, but you are protected from day 1 and adjust your offer price accordingly.

You can also work with a Tax attorney or Consultant to provide you with the Tax projections for a 5–6-year period, they use similar methods to Cook County Assessor’s Office (CCAO) this is also another way to get a better sense of what your Property Taxes are going to be.

Keep in mind there are other factors that Influence your property tax bill such as the equalization factor, tax rate, and Property tax class. getting these projections from a tax consultant will equip you for success and better protect Investor's capital.

You can find taxes information
https://www.cookcountyproperty...

Chicago, Illinois

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