[ChicagoChicago]

I live in Chicago's Lakeview neighborhood, and our properties were just reassessed for 2009, for taxes payable in 2010.

My assessment went up 39% from 2008's number, which I thought was incredible and quite honestly wrong. By Cook County's own 10/25* formula, that translates into a $688,000 market value on my condo. Now, I'd be a happy camper if I could sell my place for that, because the penthouse unit (w roof rights) in my building is on the market for $567,000... I'm thinking of offering the county a 10% discount from the supposed "market value" if they'd like to buy it...

*Assessments in Chicago should be for around 10% market value for a piece of residential property and 25% for commercial property.


Just curious if there are any other crazy calculations used in other cities.

[Steely Dan]

my annual property taxes on my unit in marina city are pretty much exactly 1% of what i paid for my unit 3 years ago, which seems like a steal to me.

[ChicagoChicago]

my annual property taxes on my unit in marina city are pretty much exactly 1% of what i paid for my unit 3 years ago, which seems like a steal to me.
Interesting. My property taxes will be 1.5% this year, and 2.1% next year if my appeal is rejected. Quite frankly, I'll have to move if this crap doesn't get fixed.

By the way, I visited Marina City (west) on Thursday evening for the first time. Very cool building and absolutely killer views.

[BTinSF]

Thanks to Prop. 13, the tax assessment on my condo can grow by only 2% per year and presently sits at about 60% of what I believe is the rough market value of the place (we must do things differently--property is assessed at full market value when it changes hands).

If you think your assessment is too high and have good comps to prove it, you should be able to appeal. I appealed my assessment 2 decades ago and found the process in San Francisco easy and straightforward. I had to go before the Assessment Appeals Board. They asked me one question: "Is this unit owner occupied?" and when I said it was they granted my appeal.

[dimondpark]

I just found my tax bill from last year:

Ad Valorem $11,385.56(1.338% tax rate)
Special Charges $992.46(A bunch of taxes for libraries, paramedics, parks etc)
Total $12,378.02

Half was due before 12/10/08 and the other half was due before 4/10/09.

They assess the house based on roughly half the actual market value(it seems).

[Rail Claimore]

Property tax rates in Alabama are set by our state constitution, so the vast majority of the state pays 0.3% or less of assessed value for residential property, and most commercial property is taxed according to usage. Where I live, the millage rate is roughly 0.5% of total assessed value without homestead exemptions, which is still a bargain compared to most areas of the country. My parents' property tax bill last year was less than $1500 for a $400K home.

[3rd&Brown]

the taxes on my rowhome in philadelphia are roughly $1100 per year. for all the talk of high taxes in philadelphia...we sure do have VERY low property taxes. we have a convoluted system of assessment in philadelphia. regardless my home would sell somewhere between $250 and $300 thousand.

in the six years that i've lived here...my property taxes have gone from just under $1000 to just over $1100. my wage taxes (city tax) have gone down and my state income tax has stayed put (we have a low flat 3.08% rate in PA).

for all the talk "relative" tax burden in philadelphia...i think i'm faring quite well.

Thanks to Prop. 13, the tax assessment on my condo can grow by only 2% per year and presently sits at about 60% of what I believe is the rough market value of the place (we must do things differently--property is assessed at full market value when it changes hands).

and prop 13 is single-handedly responsible for CA's chronically underfunded schools and astronomical state income tax rates. it's hardly worth bragging about.

[dimondpark]

One thing I notice is that my property taxes are much higher than my parents. Their home is worth about a quarter what my house is but their tax is a sixth of mine.

[VivaLFuego]

It's interesting also that some states collect property taxes based on a rate, which meant during the boom they got to take credit for 'cutting' property taxes even though the total amount collected was increasing every year.

In Illinois, property taxes are set via a levy, so the tax rate is calculated backwards - the total levy divided by the total assessed valuation of properties subject to the tax. This means that even when a taxing body does a standard inflationary increase in the levy to pay for increasing cost of services, the newspapers all go apeshit about how property taxes are going up, even if staying constant in real terms. This property tax nonsense also resulted in Cook County's ridiculous sales tax, because the Cook County property tax levy was subject to a cap, meaning it has been frozen at the same nominal level since 2000, during which time the Cook County Property tax rate has fallen by 50%. So the added revenue had to come from somewhere and they turned to the sales tax that put us up to our famous 10.25% total.

My annual property taxes are somewhere around 1.2% of the market value of my place, wherever that is in this crazy market.

[dave8721]

:previous: Here the taxes are set at a rate which is a percentage of the value of a house. The values are dropping fast and the county proposes upping the rate a little (still not enough to counteract the drop in values so most people's taxes will still go down) and the papers go crazy here as well.

[KalisPeter]

All taxes are depend on its economy and its peoples financial positions.

[VivaLFuego]

:previous: Here the taxes are set at a rate which is a percentage of the value of a house. The values are dropping fast and the county proposes upping the rate a little (still not enough to counteract the drop in values so most people's taxes will still go down) and the papers go crazy here as well.

In theory, setting the tax via a levy would allow for much more stable government finances for the obvious reason that you always know how much you're going to collect - assessed valuations, informing the tax paid on a property, is thus really only arguing about paying a fair share of the total levy. The problem is in practice, as previously stated, even an inflationary increase in the levy is treated as "the largest tax increase in history" every single year, so governments funded in part by property tax here are always chronically underfunded anyway because they are so terrified to go anywhere near raising the property tax levy (hence Cook County raising sales tax, City of Chicago raising hundreds of little user fees and excise taxes, etc.).

Setting the property tax via a rate provides a major downside when a bubble bursts, but at least that only occurs in perhaps one or two years per decade, and the rest of the time politicians get to take credit for 'cutting' taxes while still increasing the total amount raised - whereas here it is basically impossible to boast of a tax cut, even if every single year is actually a tax cut if taking inflation into account (as previously stated, Cook County has collected the same nominal amount in property tax since 2000, during which time the effective tax rate has plummeted).

It's the sort of problem that could be much-improved by a voting public more informed and educated about public finance and the very basics of micro and macroeconomics. I yearn for a day when this country could have an intelligent conversation about government revenue and tax policy.

[BTinSF]

prop 13 is single-handedly responsible for CA's chronically underfunded schools and astronomical state income tax rates. it's hardly worth bragging about.

This is no place to argue about Prop. 13 but this statement is about as false as anything I've ever seen posted here (which is a huge hurdle to jump). Use the search function to find one of the many other threads in which to argue the matter if you feel you have to make some sort of point.

It's rather hilarious that you simultaneously talk about how low texas are in Philadelphia and then try to argue that Californian's should be higher than they are even though they are substantially higher than yours even now. The taxes on a "row home" in San Francisco would probably be anywhere from 2 or 3 times yours to over 10 times, depending on when it was bought.

It's interesting also that some states collect property taxes based on a rate, which meant during the boom they got to take credit for 'cutting' property taxes even though the total amount collected was increasing every year.


One could only wish. In Arizona, while that's how they set them, they don't drop the rate when property appreciates wildly. Government just collects vastly more money and hands it out to whomever it wishes, too often in ways that obligate it to ongoing spending which became a crisis when property values fell and the amount being brought in dropped absent the sort of rate hikes that would cause popular rebellion.

[VivaLFuego]

One could only wish. In Arizona, while that's how they set them, they don't drop the rate when property appreciates wildly. Government just collects vastly more money and hands it out to whomever it wishes, too often in ways that obligate it to ongoing spending which became a crisis when property values fell and the amount being brought in dropped absent the sort of rate hikes that would cause popular rebellion.

Yeah, I suppose incompetent voters electing incompetent representatives to make patently-absurd and short-sighted financial commitments is universal irrespective of nitty-gritty government structure. :yes:

My example of boasting of "cutting" the tax rate to great public fanfare while still increasing the total amount collected is basically taken from Texas, a state whose sound financial situation is due in large part to the reliability of its property tax revenues which itself results from Texas property values not inflating as much in the boom and also a political culture that, for whatever reason, is slightly less prone than others to committing to the sorts of handouts and entitlements that bankrupt others. Income taxes, particularly those that are progressive in nature (i.e. higher rates for corporations and high-income individuals) are rather poor revenue sources considering how wildly cyclical taxable corporate income and high-income individual income are - depending on them to fund a state government necessitates a high degree of debt-issuance to even out the rough patches in bad economic years. This is theoretically doable (with the understanding that there is an additional "hidden" tax burden to cover the interest on borrowing against the future), except that in good years governments engage in handouts/entitlements rather than eliminating the debt incurred from the previous bad years, so the problem tends to compound itself until you reach something like California 2009.

[3rd&Brown]

This is no place to argue about Prop. 13 but this statement is about as false as anything I've ever seen posted here (which is a huge hurdle to jump). Use the search function to find one of the many other threads in which to argue the matter if you feel you have to make some sort of point.

It's rather hilarious that you simultaneously talk about how low texas are in Philadelphia and then try to argue that Californian's should be higher than they are even though they are substantially higher than yours even now. The taxes on a "row home" in San Francisco would probably be anywhere from 2 or 3 times yours to over 10 times, depending on when it was bought.

That's not what I said. Take your blinders off.

What I implied was that property taxes should be higher and income taxes should be lower. Further complicating things is the cap in yearly increases, which DimondPark alludes to, create the inequities he provides in the example of comparing the taxes on his own home to those of his parent's home. Why wouldn't you just tax all home owners on the value of their dwelling, instead of arbitrarily resetting them only when a home changes hands? This creates a system where neighbors with identical homes, arguably using the same exact city services, have vastly different property tax levies.

Warren Buffet highlighted this issue with respect to CA's system of property taxation when he was informally advising Schwarzeneger (sp?) during the gubernatorial elections in CA way back when. Buffet pays less in property taxes on his multi-million dollar spread in Malibu than he does on his relatively modest home in NE, simply due to Prop 13.

In PA, valuations are floated and theoretically based on market-values (though this is only partially true because most counties do not re-assess with enough regularity to maintain an accurate snap shot of valuations). If anything, assessments lag valuations because counties are slow to reassess, but no exceptions are made for homeowners based on length of ownership, date of purchase, or even for a homestead exemption. This seems to be a very fair system.

Fl recently adopted a Ca like assessment system (cap yearly increases and only re-assess when ownership changes) with disasterous effects. Prop 13-type systems are not the answer.

[emathias]

I live in a vintage residential (not a loft) building in River North here in Chicago, not that far from Steely Dan's Marina City. My taxes are actually lower now than they were when I first moved in five years ago, possibly because so much of the surrounding new construction was very high end that the levy system results in my share being lower (that's just a guess, though).

The taxes paid, as they stand this year, add up to 9/10th of a percent of my purchase price from five years ago. Which I think is eminently reasonable.

When I was house shopping I looked at a place in Lakeview that was within 10% of the same purchase price, but had taxes that were 70% higher than what I pay in my current place. It surprised me how much taxes varied between similarly-priced residences even in the same city.

[EastSideHBG]

the taxes on my rowhome in philadelphia are roughly $1100 per year. for all the talk of high taxes in philadelphia...we sure do have VERY low property taxes. we have a convoluted system of assessment in philadelphia. regardless my home would sell somewhere between $250 and $300 thousand.

in the six years that i've lived here...my property taxes have gone from just under $1000 to just over $1100. my wage taxes (city tax) have gone down and my state income tax has stayed put (we have a low flat 3.08% rate in PA).

for all the talk "relative" tax burden in philadelphia...i think i'm faring quite well.
Very true, and Philly's property tax is quite low compared to the surrounding 'burbs. His same house value if located outside of the city limits would be anywhere from $3000-$6000/yr. depending on what municipality he lived in.

[ChicagoChicago]

Viva,

Any chance you could point me in the right direction so I could read a little more on this levy system in Chicago? I just don't understand it as it is. My condo building is far and away the highest assessed of any building around me...I just don't get how it could have happened.

[SLO]

1.95% here outside Fort Worth

[VivaLFuego]

Viva,

Any chance you could point me in the right direction so I could read a little more on this levy system in Chicago? I just don't understand it as it is. My condo building is far and away the highest assessed of any building around me...I just don't get how it could have happened.

Well, here's the actual code/legislation:
http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=596&ChapAct=35%A0ILCS%A0200/&ChapterID=8&ChapterName=REVENUE&ActName=Property%2BTax%2BCode

I'll try to explain my understanding concisely:

The location of your property within certain boundaries will make it subject to the taxing authority of various property tax districts. There are seperate districts for the City, County, Public Schools, Forest Preserve, etc. etc. which are itemized on the tax bill.
Each of these bodies sets an annual tax levy, which is the total amount to be collected. In theory this means a stable and predictable revenue stream for government, but in practice there are many controls in place that make it difficult to increase the levy, even for inflationary/cost-of-living increases. Such controls can be both statutory (such as those in places preventing Cook County from increasing it's levy, but not from increasing it's Sales Tax rate, wink wink) or political (property tax is such a political hot potato because that $50/year increase would mean granny starts eating cat food and the entire community is uprooted. You love granny and the community, don't you?)
The assessors office is responsible for assigning a value to your property.
The total property tax you pay to each taxing district will be your property's share of the total assessed value of all properties subject to that district's tax. Easy example: Taxing District A sets it's property tax levy at $1000, meaning it will collect $1000 in taxes this year. There are 100 properties within Taxing District A's boundary, and the sum of their values is $100. Your property's value is assessed at $1. Thus, you are responsible for paying 1/100 = 1% of the levy, so your amount due to Taxing District A is .01*1000 = $10. To continue the example, let's say the following year you contribute to the appropriate campaign/re-election funds, and when properties in Taxing District A are reassessed, some phone calls are made and now your assessed value is only $0.50 out of a total of $100. Now your tax to TDA is $5.
Hence your tax bill will fluctuate as the relative assessed valuations and levies related to each taxing district change.
This is all further complicated by ill-conceived populist efforts of 'tax caps' that limit the amount by which an overall property tax bill can increase in a period of time (similar in thrust to CA's Prop 13 stuff). This forces some redistribution of the tax burdens within each taxing district accordingly
It's complicated further still by stuff like TIF districts, which cap in nominal dollars the amount of money certain taxing districts are collecting and puts anything else in a TIF fund. This basically necessitates taxing bodies like schools increase their levies faster than otherwise to keep up with expenses since a portion of their tax base is essentially 'freeloading' by having their contribution to that district's levy capped. As that taxing body increases its levy, the taxing body sees none of the added revenue from those properties int he TIF districts, and as that levy increases faster than normal, so does the amount in the TIF fund. So yes, TIFs are de facto tax increases, and rather serious self-perpetuating ones at that.


Ok, that's not concise, sorry. But it sounds like you should be appealing the assessor's office to have your assessed valuation reduced, which would lower the amount due to each taxing district to which your property is subject (and raise everyone else's, all else equal :) ).

Also, I'm not a real estate lawyer, so if your problem is serious I'd recommend consulting one.

It's also purely irrelevant coincidence that many of our local and state elected officials are real estate lawyers. Not sure why I'm even mentioning it...

[mersar]

My parents pay about $1200 or so a year on their half duplex, with the assessed value sitting somewhere around $250k CAD (so around 0.5%). The fun part is the taxes for the current year are based on the assessed value from July 1st of the previous year (so 2010 taxes are based in July 1, 2009), and house prices have been starting to drop a bit where we live, upwards of $50k in some places, which resulted in a huge number of appeals this year, and even more likely next year if the drop continues.

[ItsConanOBrien]

I don't own but looked up the records for 2010 for my apartment on the city's website...

I rent a condo which is worth $147,000 and $2,616 was due for taxes.

Sounds pretty cheap to me. The owner lives in another condo so I'm not sure if that factors in to their taxes for this unit.