so property in illinois like

almost every other state

is taxed at the state level the county

level

and the municipal level unfortunately in

illinois

we also have township levels

and other taxing authorities

that weigh in on property taxes but

generally what happens is and i’ll use

the city of chicago as an example and

these numbers are purely hypothetical

so

let’s say the city of chicago decides

they need

500 million dollars a year

to levy on all property owners in the

city of chicago

for their real estate tax levy whether

it’s residential commercial office

warehouse industrial retail

it doesn’t matter the city says we need

to levy 500 million dollars into our

budget

and collect that in the form of real

estate taxes that 500 million dollar

number then goes to the cook county

assessor

who’s responsible

for collecting the money

and turning it over to the city of

chicago and all of the other taxing

authorities

that get their so to speak hand in that

bill

okay

the assessor then determines so it’s not

an even weighted process so certain

properties pay

a higher percentage of the tax

than others typically residential real

estate

carries the least burden of having to

contribute to that 500 million dollar

levy

and typically office warehouse

retail industrial has the highest burden

contributing to that levy so the

assessor will

determine what

through an algorithm presumably

what percentage is going to be allocable

to what type or what class of property

then the assessor determines what every

individual property whatever class it is

is worth as far as market value

and based on that property’s market

value

and based on the assessor’s

equalization factor

and the tax rates applied

they issue property tax bills and they

collect the 500 million dollars one

misnomer that a lot of people have not

just in illinois but in every state

is that the the if the value of their

property

were less

the city wouldn’t collect its 500

million in other words if all the

properties went down in value

the 500 million dollars in my example

wouldn’t be paid that’s not true

if all property in the city of chicago

was worth zero dollars

all the assessor would do is raise the

tax rate and the city would still get

their 500 million dollars so

the value of your property is only

relevant to determine what percentage of

the 500 million you’re paying

it doesn’t mean that the taxing

authority is not going to get exactly

what they ask for

and so that’s a big misconception where

there will be development going on in

the community and everyone says well

that’s going to create more tax dollars

that’s it doesn’t create more tax

dollars it might dilute the bucket of

tax dollars being paid so that people in

the community pay less than they might

otherwise pay because someone’s being

given an eligible share

higher because they’ve created value but

it doesn’t give any more than the 500

million in my example

that the city of chicago

levies

on their property tax levy so that

that’s in a nutshell how real estate

taxes work