All Forum Posts by: Joe Ramirez

@Davis C. yes the county is requiring that the previous owners apply for the exemptions retroactively.  In the case where the previous owners have since passed away, there was a way to get the refund without getting them involved, but they require you to get a death certificate.  I imagine there might be something similar if they are still alive but unable to file, but you'd have to ask the county and/or your lawyer.

Hi @Davis C.  Sounds like a very similar situation i went through...  check out my post about it here:

https://www.biggerpockets.com/forums/664/topics/672346-cook-county-tax-exemption-treatment-on-flip

I was able to get the ball moving by talking directly to the county about my issue.

https://www.cookcountytreasurer.com/contactusbyphone.aspx

Hi all,  just wanted to update this thread in case anyone was interested in the result....

It turns out the reason we overpaid taxes was because the previous owners had the Senior Freeze exemption, but they forgot to apply for it for the year 2017.  We bought the property from them in late 2017. According to the county (which I spoke to directly), the property was still eligible for all of the previous owners' exemptions in the year 2017 if they occupied the home on Jan 1, 2016 and Jan 1, 2017 (which is expressly written in the exemption application). Since they did, they should have filed for their exemptions in 2017 like normal.  Because they didn't or forgot to, the county removed the exemptions for that year and thus we, the new owners, paid thousands more than we should have.

The lesson for me was to make sure someone is checking on this when the closing for the house occurred.  I'm not exactly sure who's responsibility it is to check that this was done properly (my agent, my lawyer, etc...), but really this was just one of those rarer cases that happened to slip through the cracks.  Good learning experience for sure.  We are now in the process of retroactively filing the exemptions with the previous owners in order to get a refund.  Thanks for all the responses here!

Thanks all for the insights.  The effect I'm talking about is definitely the removal of exemptions, not the increase in the assessment.  It just seems wrong that I had to pay the full year 2017 tax bill without exemptions even though I only owned it essentially 3 months (oct-dec) of 2017.  I'm going to appeal with the county to see if I can make sense of it.

Hi all,

I recently completed my first flip and had a question about the treatment of tax exemptions on the property.  In the end, I feel like I significantly overpaid.

We purchased the property in late September of 2017 from an elderly couple that had 3 exemptions (homeowner, senior and senior freeze).  On closing, we received about $1700 in credits towards the 2017 tax bill.  Their previous full year tax bills averaged about $2100, so this makes sense to me.

Unfortunately, we held the property for almost exactly 1 year, til late September 2018.  In that timeframe, we paid the first 2017 bill of only about $1100 (thus still reflecting the exemptions). But the final 2017 bill did NOT reflect any exemptions, so we ended up paying an additional $5800 for a total of $6900 to the county for year 2017.

Finally, when we went to sell the property, we had to give a credit to the seller based on the 2017 bill.  We credited $5500.  So we held the property for a year, but ended up paying $6900 - $1700 + $5500 = $10,700.... which seems to be almost $3000 more than what we should have paid for 1 year of ownership.

I feel like the county should have received ~80% of the 2017 bill with exemptions and ~20% of the bill without exemptions, yet they received a full year without exemptions.  Am I wrong or is this not how it works?   Is there anything I could do to appeal or is it too late now that I don't own the property? It seem like this must happen somewhat regularly, so I'm surprised there was no automated way to catch it.

Thanks in advance for any advice!

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Thanks,
Joe

Certainly @James Wise. We are actually in the process of refining the wording and it will be up on our site within the week. I'll be back to let everyone know when its up!

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@James Wise

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