The deadlines for filing assessment complaints for properties in Rogers Park, Lake and Lake View Townships have passed. Even though those deadlines have passed, there remains the opportunity to contest assessments of properties in those townships at the Cook County Board of Review. The Board of Review has been very helpful in correcting excessive assessments.

Assessments for the remainder of Chicago should be issued in the coming months. Assessments for Jefferson Township (bounded by Devon Avenue on the north, the city limits on the west, North Avenue on the south, and Western Avenue on the east) should have been issued at the end of July. Hyde Park Township (south of Pershing Road and east of State Street), South Township (south of the Chicago River and north of Pershing Road, including the Loop), West Township (the area between the two branches of the Chicago River and bounded on the north by North Avenue), and North Township (north of the Chicago River and up to Fullerton Avenue) will receive reassessment notices during the course of the summer and fall. As already stated, even if an assessment appeal is not filed with the office of the Cook County assessor, there remains the opportunity to contest the assessment at the Cook County Board of Review. Filing deadlines and hearing dates at the Board of Review will be established in the coming months.

If you have any questions about the reassessment process in general or about a specific property, call our office at 312-726-1833 and one of our attorneys will be happy to answer your questions.

Background. The “7% cap” was effective for the 2003 triennial and is an expansion of the existing Homeowner Exemption. The 7% cap is implemented by increasing the Homeowner Exemption amount from a minimum of $5,000 in Equalized Assessed Value (EAV) to a maximum of $20,000 in EAV. The cap is calculated using a 7 percent increase over the previous year's taxable value (equalized assessed valuation of a home minus exemptions.)

Homeowners Benefit Only. The benefits from the 7% cap are limited to those qualifying for a homeowner’s exemption. A notable limitation for those property owners is that the exemption is limited to $20,000 in EAV for any year. Expensive residential properties with sizable assessment increases saw their taxable assessed value increase by more than 7 percent. Non-owner occupied and investment property owners do not qualify and are taxed on the entire reassessment increase. The result of 7% cap upon a particular property’s tax bill is a function of (1) size of assessment; (2) the percentage of assessment increase over the 2002 base year; and (3) tax rate.

Renewal Controversy. The 7% cap must be renewed for the 2006 tax year, or it will expire. While providing some relief for homeowners, renewal of the 7% cap has proven to be controversial. The assessment cap created a property tax shift to commercial and industrial properties, apartment owners and renters, seniors and homeowners in areas of slow appreciation.

In the most recent session of the General Assembly, the extension and expansion of the 7% Expanded Homeowner Exemption was defeated. However, it will most likely be raised again in the fall session.

However, property owners should bear in mind that although the level of assessment reductions initiated by the Assessor’s Office provide a modest amount of tax assessment relief, the fair market valuations upon which the assessments are based continue to sky-rocket and, in most cases, will continue to produce extremely large assessment and real estate tax increases notwithstanding the Assessor’s “level of assessment” decreases. These assessment increases will occur, as in the past, each time the property receives its triennial re-assessment. For these reasons, it is important that the owner or manager of the property continue to monitor his tax re-assessments very closely and to pursue assessment relief through appeals initiated by tax counsel as in prior re-assessments.

However, due to complaints from county treasurers in Illinois regarding the “administrative burden” of having to prepare and issue “payment by legal description” tax bills for parcels smaller than a single PIN, the General Assembly recently made the issuance of such bills optional with the county treasurers, rather than mandatory. Fortunately, at least in Cook County, the Cook County Assessor’s Office has stepped in to provide this important service now that the county collectors are no longer required to do so.

If you have any questions regarding the “payment by legal description” tax payment procedures, please feel free to contact us at 312-726-1833.

Location is one fundamental poll upon which we measure real estate value. There is a second fundamental factor that is as important, though less apparent, and that is process and change. The changing needs and tastes of people who buy and use real estate fundamentally affects value. The influence of change and process on real estate values must be presented in the highest and best use section of any appraisal report. It is required by the Appraisal Standards Board.

A distinguished panel of appraisers and tax managers will consider the changes in the retail market and particularly regional shopping centers. They will look at the relationship between mall shops and anchor department stores and will seek to present a valuation model that recognizes the changes that have occurred and are occurring. There will be a presentation showing the changes in the industrial real estate market created by globalization, technology, and outsourcing. Again, the affects of those processes on value will be discussed. In our Contemporary Issues Panel, we will look at how assessments can be inflated when highest and best use is ignored and/or incorrectly applied. Finally, in what has become a regular feature, a recognized expert will analyze commercial and industrial rates for the past year.

If you are interested in attending the seminar or in receiving materials that were prepared for and presented at the seminar, please contact Linda at linda.talbot@aptcnet.com.