Chicago Property Taxes

[John T Lizzo]

Hey fellow Chicago investors,

I've seen a few forum questions about calculating/estimating Chicago property taxes so I thought I would offer some tools. I work for a commercial appraisal firm that does a lot of tax work in the city. The new assessor has been increasing assessed values for both residential and commercial properties so it is critical to have a good understanding of your potential property tax situation when running your numbers.

In Chicago commercial properties (for the most part) are assessed at 25% of fair market value and residential properties (single family and multifamily) are assessed at 10% of market value. So for a multifamily building worth approximately $1,000,000 the assessed value would be $100,000. This assessed value is multiplied by the current state equalization factor of 2.9109 to arrive at the equalized assessed valuation. This is then multiplied by your property's tax rate to get to that final property tax number. 

Example:

FMV: $1,000,000

AV: $100,000

State Equalization Factor: 2.9109 

Equalized Assessed Valuation: $291,090

Tax Rate: 7.522%

Taxes: $21,895.79

Go to the assessor's website to find your tax code and then look up what rate corresponds to that code. Properties in Cook County are reassessed every three years. A sale can also trigger a reassessment so don't necessarily take the current assessed value as your basis.

https://maps.cookcountyil.gov/cookviewer/


https://www.cookcountyassessor.com/Search/Property-Owner-Search.aspx


Hope this helps anyone trying to wrap their head around Chicago taxes. PM me with any questions or if you want my excel sheet and 2018 tax rate summary pdf.

[John Warren]

@Kendall S Jones there are a lot of attorneys who will do the contesting on the 7+ unit buildings. I think we are paying a 25% contingency of the first years savings for our Berwyn building. Just shop around and you will find someone to do it for a fair rate. I stopped trying to do my own as there are so many deadlines that if you miss one it could cost you way more than the attorney.