Understanding the Property Tax Process

Understanding theProperty Tax Process

Presented April 27, 2011

Mark D. Armstrong, CIAOKane County Supervisor of Assessments

David J. Rickert, CPAKane County Treasurer

As Supervisor of Assessments . . .

I am not who develops your property’s initial valuation (that is done by the Township Assessors).

I am the one who equalizes values between townships.

I am the clerk of the Board of Review, which reviews assessment complaints.

I am not the Supervisor of Assessors . . .

. . . or any other title which I have mistakenly been called!

. . . or any other title which I have mistakenly been called!

Ground Rules

Please hold questions until the end.I can discuss general assessment

practice, but I can’t discuss the assessment of any individual parcel in this format.

If you would like a copy of this slide show, you may request one by sending an e-mail to [email protected].

mailto:[email protected]

Myth #1

MYTH: Your Equalized Assessed Valuation and your property tax bill have a direct relationship: If the EAV changes by 5%, then the taxes for that parcel change by 5%.

An analogy . . .

Paying Property Taxes is like going out to a restaurant for . . .

Pie!

The Bakers (Taxing Bodies)

Our “County Restaurant” has several “Bakers”; each “Baker” is a local taxing body.


Some of the Bakers make small pies . . .

Special Purpose Districts* $27,319,963 2.39%

Townships and Road Districts $29,595,989 2.58%

Forest Preserve District $32,062,395 2.80%

Fire Districts $34,957,598 3.05%

Libraries/Library Districts $36,077,799 3.15%

Park Districts $47,108,179 4.11%

Kane County $54,331,006 4.75%

*Conservancy Districts, Cemetery Districts, Sanitary Districts, Special Service Areas, and TIF Districts

Taxing Bodies 2010 Levy Percent


. . . and some Bakers make bigger pies:

Community College Districts $61,721,940 5.39%

Municipalities $122,052,235 10.66%

Unit School Districts $699,784,178 61.12%

Taxing Bodies 2010 Levy Percent

The Servers (Assessors)

The Servers (Assessors) need to serve the Diners (taxpayers) one

piece of each

of the ten pies.

The Diners (Taxpayers)

EXAMPLE: Geneva Unit District 304 (2010 data)

Number of “Diners” (tax parcels)

12,633 Total size of the “Diners”

$1,409,003,529 (100%) Median Residential “Diner”

$99,507 (0.007%) Median Commercial/Industrial “Diner”

$150,029 (0.011%) Geneva Commons—Largest “Diner”

$30,579,171 (2.170%)

Pay attention to those percentages!

The Pie (Tax Bills)

EXAMPLE: Geneva Unit District 304 (2010 data)

Total size of the Pie

$74,731,335.05 (100%) Number of “Slices” (tax parcels)

12,633 Median Residential “Slice”

$5,277.70 (0.007%) Median Commercial/Industrial “Slice”

$7,957.30 (0.011%) Geneva Commons—Largest “Slice”

$1,621,871.58 (2.170%)

Tax bills are based on the “relative percentage” of the assessed valuation, not the valuation itself!

Tax Statistics

The 1991 Property Tax Extension Limitation Law (PTELL) ended the direct relationship between assessed valuations and property tax bills.

In the 2010 (payable 2011) tax year, billable values of homes dropped by a median rate of 7.18%.

However, tax bills for those same homes increased by a median rate of 2.87%.

67% of Kane County homeowners have bigger tax bills than last year, even though their billable valuations were lower.

Myth #1: The Conclusion

MYTH: Your Equalized Assessed Valuation and your property tax bill have a direct relationship: If the EAV changes by 5%, then the taxes for that parcel change by 5%.

FACT: Taxes go up because some of the “pies” get bigger!

GLOBAL valuation changes WILL NOT impact tax bills.

INDIVIDUAL valuations changes WILL impact tax bills.

Myth #2

MYTH: “Assessed Value” for property tax purposes directly relate to “Market Value”, such as in an appraisal you might get if you got a mortgage.

(Courtesy of the Aurora Beacon-News)




Assessed vs. Market Value

Difference 1: As a matter of law, regular maintenance is not considered in developing valuations for property tax purposes for homes.


Difference 1: As a matter of law, regular maintenance is not considered in developing valuations for property tax purposes for homes.

(35 ILCS 200/10‑20) Sec. 10‑20. Repairs and maintenance of residential property. Maintenance and repairs to residential property owned and used exclusively for a residential purpose shall not increase the assessed valuation of the property. For purposes of this Section, work shall be deemed repair and maintenance when it (1) does not increase the square footage of improvements and does not materially alter the existing character and condition of the structure but is limited to work performed to prolong the life of the existing improvements or to keep the existing improvements in a well maintained condition; and (2) employs materials, such as those used for roofing or siding, whose value is not greater than the replacement value of the materials being replaced. Maintenance and repairs, as those terms are used in this Section, to property that enhance the overall exterior and interior appearance and quality of a residence by restoring it from a state of disrepair to a standard state of repair do not "materially alter the existing character and condition" of the residence. (Source: P.A. 90‑788, eff. 8‑14‑98.)


In other words, the law provides that a house with a roof in this condition . . .


In other words, the law provides that a house with a roof in this condition . . .

. . . is valued the same as a house with a roof in this condition.


But when it gets to this condition where it’s beyond normal maintenance, it can factor into the valuation.


Difference 2: By law, assessed valuations must be based on:Fair Cash Value

(35 ILCS 200/1‑50) Sec. 1‑50. Fair cash value. The amount for which a property can be sold in the due course of business and trade, not under duress, between a willing buyer and a willing seller. (Source: P.A. 88‑455.)


Difference 2: By law, assessed valuations must be based on:Fair Cash ValueMultiplied by 33.33%


(35 ILCS 200/9‑145) Sec. 9‑145. Statutory level of assessment. Except in counties with more than 200,000 inhabitants which classify property for purposes of taxation, property shall be valued as follows: (a) Each tract or lot of property shall be valued at 33 1/3% of its fair cash value.(Source: P.A. 91‑497, eff. 1‑1‑00.)


Difference 2: By law, assessed valuations must be based on:Fair Cash ValueMultiplied by 33.33%As of January 1 of the

assessment year



(35 ILCS 200/9‑95) Sec. 9‑95. Listing of property. All property subject to taxation under this Code, including property becoming taxable for the first time, shall be listed by the proper legal description in the name of the owner, and assessed at the times and in the manner provided in Sections 9‑215 through 9‑225, and also in any year that the Department orders a reassessment (to the extent the reassessment is so ordered), with reference to the amount owned on January 1 in the year for which it is assessed, including all property purchased that day. (Source: P.A. 85‑1221; 86‑1481; 88‑455.)



assessment yearBased on the three

prior years of sales




(35 ILCS 200/1‑55) Sec. 1‑55.33 1/3%. One‑third of the fair cash value of property, as determined by the Department's sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for the studies were collected. (Source: P.A. 86‑1481; 87‑877; 88‑455.)



assessment yearBased on the three

prior years of sales




(35 ILCS 200/1‑55) Sec. 1‑55.33 1/3%. One‑third of the fair cash value of property, as determined by the Department's sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for the studies were collected. (Source: P.A. 86‑1481; 87‑877; 88‑455.)

The Case-Schiller Index shows how three-year means can differ from current value points:

Case-Schiller Index (10-City National)

Case-Schiller Index (10-City National)

Case-Schiller Index (Chicago)

Case-Schiller Index (Chicago)

Myth #2: Conclusion

MYTH: “Assessed Value” for property tax purposes directly relate to “Market Value”, such as in an appraisal you might get if you got a mortgage.

FACT: State law requires the assessed valuations to reflect something a little different than the current market conditions.They are 12-18 months behind market conditions as of

the assessment date.They are 30-36 months behind market conditions by

the time tax bills are due for that tax year.

Myth #3: The Myth

MYTH: Complaints to Board of Review require hiring a lawyer, appraiser, or some other professional; it’s just too complicated for a typical homeowner to figure out.

When Can Complaints be Filed?

By state law, “the complaint shall be filed on or before 30 calendar days after the date of publication of the assessment list” in a local newspaper. (35 ILCS 200/16-55)

Assessment lists must be published “by township, if so organized.” (35 ILCS 200/12-10)

Complaints should not be filed until the assessments are certified to the Board.

The final filing dates for the 2011 assessment year are not yet set.

Finding Out Deadlines

To find out a township deadline:Visit the Board’s web site at

www.KaneCountyAssessments.org/Appeal.htm.Call the Board Office at (630) 208-3818.Go to www.KaneCountyAssessments.org,

select the “subscribe” link, and register your e-mail address to get assessment news.

http://www.kanecountyassessments.org/Appeal.htm

http://www.kanecountyassessments.org/

Finding Out Deadlines

To find out a township deadline:Visit the Board’s web site at

www.KaneCountyAssessments.org/Appeal.htm.Call the Board Office at (630) 208-3818.Go to www.KaneCountyAssessments.org,

select the “subscribe”, link, and register your e-mail address to get assessment news.

How Can Complaints be Filed?

Always start by calling your Township Assessor!!!

1,278 homes received reductions because the taxpayer contacted the Township Assessor directly, and the Township Assessor recommended a reduction.

Formal assessment complaints are heard by the County Board of Review.

How Can Complaints be Filed?

Assessment complaints MUST be filed within 30 days of a township assessment roll’s publication in a local newspaper.

Assessment Complaints can be made only on the Assessed Valuation; the Illinois Property Tax Appeal Board has consistently ruled that percentage of increase and the amount of taxes are not legitimate grounds for appeal.

Why Are Complaints Filed?

There are three principal grounds for an assessment complaint.Overvaluation (“The assessor shows my

house to be worth $275,000, but recent sales of comparable houses show a range of $220,000 to $235,000.”)

Lack of Uniformity (“The assessor has valued my home at $275,000, but comparable houses show a value of $220,000 to $235,000.”)

Incorrect physical description (“The assessor thought I had a 3,800-square-foot house; I only have 3,400 square feet.”)

May short sales be used?

A “Short sale” transaction is where the seller sells a home for less than the balance of the existing mortgage.

Short Sales often require lender cooperation. Short Sales have always been included in

Kane County sales-ratio studies, and the Board of Review will consider short sales in reviewing assessment complaints.

The state began tracking short sales in 2011.

May foreclosure sales be used?

“Foreclosure Sales” can consist of several types of transactions.Transfer from borrower to lender.Court-ordered transfers to lender.Sale from lender to new buyer.

May foreclosure sales be used?

A sale from a lender to a new buyer may be considered a market transaction, but only if it meets other requirements (such as being “advertised for sale”.)

By state law, sales from lenders have been excluded from Kane County sales-ratio studies prior to 2011.

The Board of Review has been considering post-foreclosure sales from lenders in reviewing assessment complaints.

Last Year’s Results

In 2010, the Board of Review certified assessments of 145,985 residential properties

1,515 Homeowners filed individual assessment complaints.77% were filed by the homeowners

themselves.23% were filed by attorneys representing

the homeowners.

Last Year’s Results

Of the homeowners who filed complaints themselves:The Board reduced 62.5% of them.The median reduction was 8%.

Of the homeowners used an attorney:The Board reduced 62.1% of them.The median reduction was 9%.


MYTH: Complaints to Board of Review require hiring a lawyer, appraiser, or some other professional; it’s just too complicated for a typical homeowner to figure out.

FACT: In 2010, homeowners who filed themselves had a similar success rate and median reduction than those who filed using a paid attorney.

Myth #4

MYTH: Homestead exemptions don’t provide any significant tax savings for homeowners.

Homestead Exemptions

Homestead Exemptions reduce the Equalized Assessed Value (EAV) of owner-occupied dwellings.

General

………………………………………….$6,000 Senior Citizen

…………………………………..$4,000 Senior Freeze

………………Base Year Assessment Homestead Improvement

……………..up to $25,000 Returning Veterans

…………………………….$5,000 Disabled Veterans Standard

…………up to $5,000 Disabled Veterans Adaptive

………….up to $70,000 Disabled Persons

………………………………$2,000

Direct Benefits of Exemptions

(based on a median Kane County tax rate of 7.81%)

General ………………………………………...$469

Senior Citizen …………………………………$312

Senior Freeze …………..$78 per $1,000 increase

Homestead Improvement …………..Up to $1,953

Returning Veteran ……………………………$391

Disabled Veteran Standard …………...Up to $391

Disabled Veteran Adaptive ………………...$5,467

Disabled Person ………………………………$156


MYTH: Homestead exemptions don’t provide any significant tax savings for homeowners.

FACT: The typical homeowner saved hundreds of dollars because of homestead exemptions; some low-income senior homeowners saved thousands.

Whom Should I Call?

“The offices of the chief county assessment officer shall be open all the year during business hours to hear or receive complaints or suggestions that property has not been properly assessed.”

—35 ILCS 200/9-10

Whom Should I Call?

For questions about Exemptions or the Kane County Board of Review, taxpayers should call the County Assessment Office at (630) 208-3818 or visit the web site at www.KaneCountyAssessments.org.

For questions about property tax bills, taxpayers should call the Kane County Treasurer at (630) 232-3565 or visit the web site at www.KaneCountyTreasurer.org.

For questions about individual assessments, taxpayers should call their township assessor:

http://www.kanecountyassessments.org/

http://www.kanecountytreasurer.org/

Township Assessors

Hampshire Township Assessor Rose M. Letheby(847) 683-4480Rutland Township Assessor Janet Siers(847) 428-5219Dundee Township Assessor Michael Bielak (847) 428-2634Burlington Township Assessor Debbie McKermitt(847) 683-2555Plato Township Assessor Janet Roush (847) 464-4221Elgin Township Assessor Steve Surnicki (847) 741-5110Virgil Township Assessor Micheal Yagen (815) 827-3383Campton Township Assessor Alan Rottmann (630) 513-5430St. Charles Township Assessor Colleen Lang (630) 584-2040Kaneville Township Assessor Margaret Mangers (630) 557-2858Blackberry Township Assessor Uwe Rotter (630) 365-6580Geneva Township Assessor Denise Lacure (630) 232-3600Batavia Township Assessor Tammy Kavanaugh (630) 879-1323Big Rock Township Assessor Rebecca Byington (630) 556-4340Sugar Grove Township Assessor Laura Ross (630) 466-5255Aurora Township Assessor Davis Offutt (630) 896-7792

David J. RickertKane County Treasurer

Property Tax Bill Presentation

Dave Rickert Kane County Treasurer

Experience

Treasurer of Kane County, first elected November 1998American General Corporation, Senior Auditor, 1997-1998USLIFE Credit Life Corporation, Senior Accountant, 1993-1996United States Army Reserve, Sergeant, 1989-1992United States Army, Specialist, 1985-1988

Education

Roosevelt University, Master of Science. - AccountingNorthern Illinois University, Bachelor of Science - FinanceElgin Community College, Associate of Science – Accounting

Professional Designations

Licensed Certified Public AccountantIllinois County Treasurer’s Association Training ChairmanChairman Illinois County Treasurer’s Association Zone IV

Overview of the Tax Process

• Township Assessors– Perform Assessments

• Supervisor of Assessments– Equalize Assessments– Apply Exemptions and Maintain Tax Address Database– Coordinate Board of Review Hearings

• County Clerk– Receive Taxing District Levy Requests– Extend Property Taxes

• County Treasurer– Collect, Invest, Disburse Property Taxes

Outline of Discussion

• Property Tax Bill– Address– Due Dates– Parcel Number– Tax Rates– Tax Calculation– Change of Address Form– Contact Information

Address

Address

Address

• Address

• This is the mailing address of the tax bill.

• All billings and notices from the Treasurer’s office will be sent to this location.

• We recommend that you have your bill mailed directly to you and not to a mortgage company. Almost all mortgage companies obtain payment information electronically and do not require a bill.

Due Dates

1st Installment due

June 1st.

2nd Installment due

September 1st.

Due Date Payment Schedule located at the bottom of the bill. Please note the penalty for late payment is 1.5% per month. That is 18% on an annual basis!

Due Dates

Due Dates

Due Dates

Parcel Number

Parcel Number

Parcel Number

Parcel Number

• This is the 10 digit parcel number of the tax bill. This is the number we use to track your property.

This number is broken down as follows:

XX-XX-XXX-XXXTownship Section Block Parcel

If you contact the Treasurer’s Office looking for tax information on a property, this will be the first piece of information we will ask for.

Tax Rates

Tax Rates:

Listed are the taxing districts you will be paying taxes to.

Both current year and prior year information is provided

For information on tax rates you may contact the Kane County Clerks office at (630) 232-5964

Tax Calculation:

Equalized Assessed Valuation

XState Multiplier

-Exemptions

XTax Rate

=Property Taxes

• Homestead Exemption

• Senior Exemption

Senior Exemption

Homestead Exemption

Tax Calculation

Change of address form:

Only fill out if you want to change the mailing address of your property tax bill.

This will not change the ownership of the property.

Change of address form

Change of address form

Contact Information:

All 16 Township Assessors

Supervisor of Assessments

County Clerk

Treasurer

Township AssessorsOther

Numbers

Kane County TreasurerProperty Tax Presentation

Thank You!

To request a copy of this presentation,please e-mail [email protected].

mailto:[email protected]

Documents

Understanding the Property Tax Process