Transcript Real Estate Assessment

Understanding the
Property Tax Process
Presented April 27, 2011
Mark D. Armstrong, CIAO
Kane County Supervisor of Assessments
David J. Rickert, CPA
Kane 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 email to [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.
The Bakers (Taxing Bodies)
Some of the Bakers make small pies . . .
Taxing Bodies
2010 Levy
Percent
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
The Bakers (Taxing Bodies)
. . . and some Bakers make bigger pies:
Taxing Bodies
2010 Levy
Percent
$61,721,940
5.39%
Municipalities
$122,052,235
10.66%
Unit School Districts
$699,784,178
61.12%
Community College Districts
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)
(Courtesy of the Aurora Beacon-News)
(Courtesy of the Aurora Beacon-News)
(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.
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.
(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.)
Assessed vs. Market Value

In other words, the
law provides that
a house with a
roof in this
condition . . .
Assessed vs. Market Value
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.

Assessed vs. Market Value

But when it gets to
this condition where
it’s beyond normal
maintenance, it can
factor into the
valuation.
Assessed vs. Market Value
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.)
Assessed vs. Market Value
Difference 2: By law,
assessed valuations
must be based on:
 Fair Cash Value
 Multiplied by 33.33%
(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
(35 ILCS 200/9-145)
and trade, not under duress, between a willing
Sec. 9-145. Statutory level of assessment.
buyer and a willing seller.
Except in counties with more than 200,000
(Source: P.A. 88-455.)
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.)
Assessed vs. Market Value
Difference 2: By law,
assessed valuations
must be based on:
 Fair Cash Value
 Multiplied by 33.33%
 As of January 1 of the
assessment year
(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
(35 ILCS 200/9-145)
and trade, not under duress, between a willing
Sec. 9-145. Statutory level of assessment.
buyer and a willing seller.
Except in counties with more than 200,000
(35
ILCSP.A.
200/9-95)
(Source:
88-455.)
inhabitants which classify property for purposes of
Sec. 9-95. Listing of property. All property
taxation, property shall be valued as follows:
subject to taxation under this Code, including
(a) Each tract or lot of property shall be
property becoming taxable for the first time, shall
valued at 33 1/3% of its fair cash value.
be listed by the proper legal description in the
(Source: P.A. 91-497, eff. 1-1-00.)
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.)
Assessed vs. Market Value
Difference 2: By law,
assessed valuations
must be based on:
 Fair Cash Value
 Multiplied by 33.33%
 As of January 1 of the
assessment year
 Based on the three
prior years of sales
(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
(35 ILCS 200/9-145)
and trade, not under duress, between a willing
Sec. 9-145. Statutory level of assessment.
buyer and a willing seller.
Except in counties with more than 200,000
(Source:
(35
ILCSP.A.
200/9-95)
88-455.)
inhabitants which classify property for purposes of
Sec. 9-95. Listing of property. All property
taxation, property shall be valued as follows:
subject to taxation under this Code, including
(35(a)
ILCS
Each200/1-55)
tract or lot of property shall be
property becoming taxable for the first time, shall
valued
Sec. at
1-55.33
33 1/3%
1/3%.
ofOne-third
its fair cash
of the
value.
fair cash
be listed by the proper legal description in the
(Source:
value
of property,
P.A. 91-497,
as determined
eff. 1-1-00.)by the
name of the owner, and assessed at the times and
Department's sales ratio studies for the 3 most
in the manner provided in Sections 9-215 through
recent years preceding the assessment year,
9-225, and also in any year that the Department
adjusted to take into account any changes in
orders a reassessment (to the extent the
assessment levels implemented since the data for
reassessment is so ordered), with reference to
the studies were collected.
the amount owned on January 1 in the year for
(Source: P.A. 86-1481; 87-877; 88-455.)
which it is assessed, including all property
purchased that day.
(Source: P.A. 85-1221; 86-1481; 88-455.)
Assessed vs. Market Value
(35 ILCS 200/1-50)
Difference 2: By law,
Sec. 1-50. Fair cash value. The amount for which
a property can be sold in the due course of business
(35 ILCS 200/9-145)
assessed valuations
and trade, not under duress, between a willing
Sec. 9-145. Statutory level of assessment.
buyer and a willing seller.
Except in counties with more than 200,000
(Source:
(35
ILCSP.A.
200/9-95)
88-455.)
must be based on:
inhabitants which classify property for purposes of
Sec. 9-95. Listing of property. All property
taxation, property shall be valued as follows:
subject
to taxation under this Code, including
 Fair Cash Value
(35(a)
ILCS
Each200/1-55)
tract or lot of property shall be
property becoming taxable for the first time, shall
valued
Sec. at
1-55.33
33 1/3%
1/3%.
ofOne-third
its fair cash
of the
value.
fair cash
be listed by the proper legal description in the
(Source:
value
of
property,
P.A.
91-497,
as
determined
eff.
1-1-00.)
by
the
 Multiplied by 33.33%
name of the owner, and assessed at the times and
Department's sales ratio studies for the 3 most
in the manner provided in Sections 9-215 through
years preceding the assessment year,
 As of January 1 of the recent
9-225, and also in any year that the Department
adjusted to take into account any changes in
orders a reassessment (to the extent the
assessment levels implemented since the data for
reassessment is so ordered), with reference to
assessment year
the studies were collected.
the amount owned on January 1 in the year for
(Source: P.A. 86-1481; 87-877; 88-455.)
which it is assessed, including all property
 Based on the three
purchased that day.
(Source: P.A. 85-1221; 86-1481; 88-455.)
prior years of sales
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.

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 #3: The Conclusion
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 #4: The Conclusion

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 lowincome 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:
Township Assessors
Hampshire Township Assessor Rose M. Letheby
Rutland Township Assessor Janet Siers
Dundee Township Assessor Michael Bielak
Burlington Township Assessor Debbie McKermitt
Plato Township Assessor Janet Roush
Elgin Township Assessor Steve Surnicki
Virgil Township Assessor Micheal Yagen
Campton Township Assessor Alan Rottmann
St. Charles Township Assessor Colleen Lang
Kaneville Township Assessor Margaret Mangers
Blackberry Township Assessor Uwe Rotter
Geneva Township Assessor Denise Lacure
Batavia Township Assessor Tammy Kavanaugh
Big Rock Township Assessor Rebecca Byington
Sugar Grove Township Assessor Laura Ross
Aurora Township Assessor Davis Offutt
(847) 683-4480
(847) 428-5219
(847) 428-2634
(847) 683-2555
(847) 464-4221
(847) 741-5110
(815) 827-3383
(630) 513-5430
(630) 584-2040
(630) 557-2858
(630) 365-6580
(630) 232-3600
(630) 879-1323
(630) 556-4340
(630) 466-5255
(630) 896-7792
David J. Rickert
Kane County Treasurer
Property Tax Bill Presentation
Dave Rickert
Kane County Treasurer
Experience
Treasurer of Kane County, first elected November 1998
American General Corporation, Senior Auditor, 1997-1998
USLIFE Credit Life Corporation, Senior Accountant, 1993-1996
United States Army Reserve, Sergeant, 1989-1992
United States Army, Specialist, 1985-1988
Education
Roosevelt University, Master of Science. - Accounting
Northern Illinois University, Bachelor of Science - Finance
Elgin Community College, Associate of Science – Accounting
Professional Designations
Licensed Certified Public Accountant
Illinois County Treasurer’s Association Training Chairman
Chairman 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
•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.
Address
Address
Address
Due Dates
1st Installment due
Due
Dates
June 1st.
2nd Installment due
Due
Dates
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
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:
Parcel
Number
Parcel
Number
XX-XX-XXX-XXX
Township
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.
Parcel
Number
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
Rates
Tax Calculation:
Equalized Assessed Valuation
X
State Multiplier
Tax
Calculation
Exemptions
X
Tax Rate
=
Property Taxes
•Homestead Exemption
•Senior Exemption
Homestead
Exemption
Senior
Exemption
Change of address form:
Change of
address form
Only fill out if you want to
change the mailing address of
your property tax bill.
Change of
address form
This will not change the
ownership of the property.
Contact Information:
All 16 Township Assessors
Supervisor of Assessments
County Clerk
Treasurer
Other
Numbers
Township
Assessors
Kane County Treasurer
Property Tax Presentation
Thank You!
To request a copy of this presentation,
please e-mail [email protected].