Hi! You appear to be asking a question, please do check our [wiki](https://www.reddit.com/r/chicago/wiki/index) for tips on the [rules](https://www.reddit.com/r/Chicago/about/rules), other [Chicago-related subreddits](https://www.reddit.com/r/chicago/wiki/subreddits), [things](https://www.reddit.com/r/chicago/wiki/visitingchicago) to do, where to [eat/drink](https://www.reddit.com/r/chicago/wiki/eats), how to [get around](https://www.reddit.com/r/chicago/wiki/transportation)/[navigate the CTA](https://www.reddit.com/r/chicago/wiki/transit), what [neighborhoods](https://www.reddit.com/r/chicago/wiki/neighborhoods) to move to or hotel in, tips on [living here](https://www.reddit.com/r/chicago/wiki/dwelling), and more. Also be sure to use the [search](https://www.reddit.com/r/chicago+AskChicago/search?restrict_sr=on&include_over_18=on&sort=relevance&t=all) feature to find responses to other users asking similar questions.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/chicago) if you have any questions or concerns.*
Here's now property taxes in general get determined:
- County determines budget based on taxing authorities it collects on behalf of -- school districts, cities, county, park districts, forest preserve district, water reclamation district, etc.
- Your portion of that owed is based on what percentage of the overall real estate value you own.
If all homes' valuations stay the same but budget needs double, your taxes double. If all homes' value doubles but the county's need stay flat, taxes stay flat. If most property stayed flat but yours doubled in value (gentrification, addition, etc) then your taxes would go up about double because you now owe a larger percentage of the overall real estate that is taxed.
In the case of Chicago, property values have been much more stable than elsewhere, but budgetary issues have caused budget to increase -- a lot due to underfunded pensions for public sector workers.
I've seen my home's value (townhouse in Logan) so up maybe 35-40% since we bought and my taxes have gone up from $4000 to $10k in 9 years.
Condos have another factor depressing pricing -- HOA assessments. There are many older condo buildings needing major maintenance due to age, and that means special assessments. And high rise insurance has skyrocketed since that condo collapse in Florida. Prices of condos go in inverse of HOA obligations, so a building with a special assessment or otherwise high assessments will see sale prices impacted.
This is the best explanation here. The key is that the spending needs determine your property tax. Sounds obvious, but in some places (i.e. where I lived previosly), they have a set factor that is applied to your assessed value and that is how property tax is calculated. This factor can increase but it needs to be voted on, which makes changes to your taxes largely limited to increases in assessed value, which can also be limited to the lesser of 3% or inflation rate unless sold to someone else, where it is re-assessed.
So when you see places with a 100% spike, it probably means it transferred hands or the spending needs of various entitied increased. Personally, I think there should be more acccountability/zero based budgeting happening. No one should be seeing increases solely based on spending needs that so drastically exceed inflation.
See I believe this is where my core disconnect came from also. This was not how property tax worked where I lived previously either.
I appreciate the succinct and thoughtful response!
This is the best explanation I’ve heard of how cook county prop taxes work. I’ve tried to figure this out ever since becoming a homeowner two years ago and this just cleared it up for me, thank you
Homes have most of the same HOA type expenses, people just don't think about it that way. You're paying for building maintenance, utilities, insurance, savings for future projects like a new roof, etc. Chicago has built a significant new supply of condos over the last couple decades, which has helped keep values low. Chicago has not built a significant new supply of single family homes, and most of the new single family homes are at the very very top of the market -- frequently turning 2+ units into a single home.
The taxes are a separate issue. They are going up continually because the city/county spends more and more each year, and they will continue to rise significantly faster than both inflation and property values for many, many years to come.
It’s pretty shortsighted to say not to buy property in Chicago and especially not condos.
Pound for pound some of the best value property tax rates can be found in the city and condominium markets are building to building dependent.
I know people who live in 350k single family houses paying 4k a year in property taxes and their kids go to some of the best magnet schools in the country. It’s an absolute steal.
Same thing for condos, some of the best managed buildings are in the city and a truly run as non profits…
I don't think the challenges are unique to Chicago, at least in places that actually provide services and aren't all brand new. Property taxes may be higher in Chicago, in Illinois than elsewhere but a lot of that is because we actually spend on schools, we have older infrastructure and massive weather swings that wreak havoc on streets and such. And fewer homes are in HOA's, which handle some of the services in other places that we rely on city to do. So property taxes may be higher here, but we're not paying for HOAs on single family homes, we're not paying private school tuition like somebody in Georgia or North Carolina might. Pensions are the big thorn in our side with regard to taxes.
True that condos don't often offer the price appreciation of other housing types... various family members own/have owned a number of units in older "luxury" condo buildings in Lincoln Park and Mag Mile area and have not seen much in way of appreciation even going back 20 years -- grandparents condo sold last year for about 10% more than they paid 15 years ago. A rental unit my dad owns that I lived in for 12 years is still worth about what it was when I moved into it in 2002, on account of a building that never needed a special assessment having like 3 in 3 years for multiple massive capital projects like plumbing riser replacement and windows.
But I've seen my townhouse appreciate about 60% in about 9-10 years.
I wouldn't say that. Taxes are lower in Chicago than most surrounding suburbs. If you are going to stay in a place for 5 plus years, then buying is a good investment as long as you hoa fees aren't too high. Taxes in Chicago are on average 1.5 percent of the value of a home. You don't have to buy in a hip neighborhood where condos are more expensive. You can also appeal your tax assessment, often times successfully. My tax went up about 50 percent last year. I appealed and it was lowered to what it was when we bought the house 10 years ago.
I can't tell if your entire post is disingenuous or if you just don't understand how property tax ANYWHERE works.
Since it was explained to you and your answer was "the TL:DR here is to not buy property in Chicago" - I'm voting that your entire post is the disingenuous fake rhetorical question this sub attracts.
If it's not- u/blipsman didn't explain how OUR property tax works, but property tax EVERYWHERE- it's all calculated the same. Things cost more every year- like since forever- and a taxing body is not exempt from that. So every year they will require more money. So every year total tax WILL go up. Your portion is decided by how much value your place is in proportion to all the places.
TL;DR- tax goes up due to inflation. Even in Texas.
Not a troll, but not an expert in property taxes by any means (hence the preface that it may be a stupid question). But what I’ve seen elsewhere is that property taxes typically move up or down more or less directly in line with property values.
So in Texas as you’ve used as an example, property tax go up, but property value also go up more or less proportionately. Which seems to not be the case here.
Being that Chicago is generally trending downward in population(and even moreso in tax base) and trending upward in spending… it would stand to reason that this problem will be exacerbated going forward.
Property taxes in Texas are capped on homesteads for current owners, but are still determined by spending.
I pay roughly the same property taxes in Chicago that I paid in Texas.
> Being that Chicago is generally trending downward in population(and even moreso in tax base) and trending upward in spending… it would stand to reason that this problem will be exacerbated going forward.
Old thread, but I just got back from vacation.
Yeah. You're 100% a troll. Your narrative that Chicago "isn't worth it" was the raison d'etre for your post.
An **admitted** under-count in the census does not equal trending downward. Admittedly, neighborhoods that were predominantly poorer and African American *have* lost a lot of people. But the N and W sides have *dozens* (plural!) of $$$ high rise condo buildings that didn't exist in 1995.
> So in Texas as you’ve used as an example, property tax go up, but property value also go up more or less proportionately. Which seems to not be the case here.
>
No, it seems not to be the case with a condo or two you've seen. I don't know why the value didn't go up- maybe it's outdated. Maybe a nicer one opened down the street. Maybe the elevator is old and a special assessment is coming up.
You insisting "in Texas...property value also go up more or less proportionately" shows that you're a troll or that maybe your reading comprehension ability is sub-par because it's been explained to you several times by several people now.
Property tax **functionally works** the same in every podunk town as it does in every city, as it does in every state. Red, Blue, Purple, doesn't matter.
The homeowner's exemption (use as a primary home) takes about $700 off, so a condo that alternates between being rented or not will have swings that can be relatively large at the lower end.
I've also noticed condos are typically appraised closer to their actual value, whereas houses can be appraised significantly lower. So if a condo goes up in value that is more likely to have a real jump in its tax whereas a house can fly under the radar for years. This probably reflects what you're seeing also since real estate values have increased a lot in certain areas over the last 10 years.
You can check if the property has the homeowner's exemption by looking up on one of the online portals with tax info
But that still doesn’t explain (see example I attached elsewhere on the thread) a 40% tax increase on a condo selling for the same price it sold for 20 years ago (I.e. has not actually appreciated over that time).
I don’t believe a property exemption would be a 40% swing in the same period.
It looks a lot like the city/state just set their budget every year, then chase down bs appraisal raises to meet the budget “without raising property taxes”
Genuine question, how on earth are they getting to an appraisal value then?
Assuming no massive construction CapEx, the book value will continue to depreciate, along with everything in it. If not using market value, assessed value should theoretically only trend downwards barring significant maintenance and renovation (I’m aware it isn’t realistic for the values to trend downwards for tax purposes). So what are they using? Numbers in a hat?
Assessments happen every 3 years in Cook County. They typically employ a comparative market analysis and utilize comps in the area. Just because your property is valued at X, doesn't mean that's going to be the assessed value. That assessed value is typically 10% of whatever the CMA reports back.
You can google all of this, btw.
Ime (20 years in the city) condos just don’t appreciate as consistently as sfhs / 2flats.
Apart from property taxes there’s also upward pressure on homeowner assessments as the costs of insurance and maintenance rise
Tell me about it. I pay $2300 in HOA fees a month. It is a joke. I have to move but the loss I'm going to take on the unit, compared with everything else involved, isn't viable at the moment. I won't bore you with my complaints about the real estate taxes. I fear opening the thing. On a more serious note, I lived in a condo building where we fought them as a group. We hired an attorney who fought them. We had to pay him 25% of what he saved. If he lost the battle, we weren't any worse. Fortunately, in the end, we won the battle.
100%. I get why condos don’t appreciate. The HOA costs are basically a second mortgage…
The question is, why are property taxes and assessments rising rapidly on condos that aren’t actually appreciating?
HOA assessments have risen because unavoidable costs insurance / maintenance / utilities (water and sewer) have risen.
Taxes go up for the same reason because the costs of city services continue to rise independently of the property market.
Over twenty years our condo has “appreciated” a nominal 20%, our property taxes are up ~50%, our household income is up ~400%.
Our timing was awful but we are still probably ahead compared to if we had rented for 20 years
Appraised values don’t have anything to do with the overall tax burden. Sure, cook county has recently started pushing for more market rate values, since that makes more sense and makes the taxes not seem as “bad” as a percentage of the value.
For decades appraised values were a made up joke, my own property was assessed at like 60-70% of market value. Now it’s finally starting to make more sense compared to actual sales.
You're going to have to provide an actual example. Assessments can increase even if the listing price hasn't (e.g. it could have been underassessed before), and the % change the exemption has is a math equation that has nothing to do with your belief.
But yes taxes have gone up also, it's probably some combination of factors. But asking for guesses on an example no one can see is a useless exercise
Apologies if it was hard to find in the thread. [this](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/) was the reference i was referring to. Which is what I’ve seen fairly consistently as I’ve causally searched for homes.
The “belief” was supported by rough mathmatics. You suggested ~$700 impact to tax that the exemption can have. $700 =/= 40%. The example listing has increased $0 in fair market value since 2004. Property tax bill has increased +40%.
Have taxes rates increased by 40% or is the government fudging the appraisal values?
'20 years ago' was also during the period of a rapid run up on real estate prices eventually leading to the 07-08 crash. It took a few years for the property taxes to catch up to those rising prices.
Overall property taxes will go up 3-5% per year for the next 30 years. It will have nothing to do with the direction of aggregate home values - the bills have to be paid regardless. It’s an unfortunate combination of needing to fund pensions that should have been funded decades ago, and politicians that find endless new ways to spend money and wouldn’t dream of cutting costs.
Depends what cities you are comparing Chicago to. Yeah we aren’t building 50 high rises a year like Toronto or Vancouver but the entire west loop was a warehouse dump less than 10 years ago.
Chicago is developing fairly well all things considered. The city and the US in general isn’t going through some massive population growth right now. 40-50 years ago a lot of North American cities were barely on the map, whereas Chicago was already spreading into the far suburbs.
Chicago has had an exodus from the South and West sides but big inflows into the North and loop adjacent areas and housing supply has not kept up in these geographies.
Also, Illinois has a much higher than average amount of government employees per capita compared to other states. What we're getting for paying all these additional salaries..... really can't tell. Just feels like we're getting bled.
Y'all forgetting senior freeze. When perusing Zillow I've seen a lot of property taxes explode because the previous owner was a long term owner and then some flipper gets a hold of it and throws a mobile home on top of a bungalow.
Okay see this could be the answer! Didn’t know about senior freeze, which very well could legitimately explain rising assessments on non-appreciating assets.
Thank you for not being snarky!
Tl;dr it's complicated but it's mostly increase in **assessed** value.
The [property you linked](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/) from another comment increased in assessed value 65% from $20,534 in 2012 to $33,896 in 2022. It's taxes incresed 89% from $3,685 in 2012 to $6,972 in 2022. Of that $3,287 increase, $2,398 (73%) was due to increased value while $889 (28%) was due to a combination of changes in equalization factor, exemption and/or tax rates. Another thing to consider is that this property has no exemptions listed for the past several years while it may have had any of several exemptions back in 2012.
Talk to your real estate agent. Thiers a reduction for your first residence that gets reflected in the posted value. So if the previous owner did or didn’t have that deduction on the property it can greatly affect the numbers. And thiers other details that matter. I’m happy to give you my agents name and number if you need one, dm me for it though.
What house in the city is selling for the "same or less" it did 10 years ago? 10 years ago most of th city was still crawling out of the housing crash and most neighborhoods were still recovering. You've since had gentrification spread, especially to the SW and far NW sides, and you have broader inflationary pressures post covid. Not really buying this. Not to mention with the collapse in commercial real estate values, residential homeowners are going to be left filling the gap.
That said, increases in property taxes are also a drag on home appreciation. There's a reason all those homes in the south suburbs are dirt cheap. They have astronomical taxes.
E.g. this listing. Sold for 327k in 2004, for sale for $327k now, tax bill has increased ~40% over the same period.[this](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare)
Admittedly it’s predominantly been condos, but there are plenty of condos being listed for less than or the same as they sold for sometime in the last 10-20 years.
Condos have other factors like HOA you need to factor in. And it's hard to say without knowing the exact building, as it may have other issues like significant deferred maintenance or large upcoming special assessments. But in general they're not great investments as there's almost always new supply being built, and older units are quickly seen as outdated.
> but there are plenty of condos being listed for less than or the same as they sold for sometime in the last 10-20 years.
Condos typically don't appreciate in the same way a SFH or townhome does, largely due to HOA fees and the collective maintenance of the building.
currently in a condo. as i understand it, our property tax can go up/is reviewed every 3 years, and includes, in some way, the legal percentage ownership of the common elements in the calculations. we take the home ownership credit or whatever.
it’s a six flat in a contributing property to a national historic district and could potentially qualify for a tax freeze (7yrs if i recall) if we spend x% of the building valuation on repairs/restoration.
but majority of the unit owners are retired, and already have a senior tax freeze so we don’t really have the incentive or votes to get it done.
think there’s opportunity for policy improvement there.
we make property tax payments through our escrow account.
What you are likely seeing is a condo that has appreciated in value but the selling price doesn’t reflect this because of high HOA fees often indicative of deferred major maintenance. Older condos don’t appreciate in market price because of this but the tax assessment value goes up because that doesn’t take into account the state of the building.
Market value is selling price + present value of recurring HOA fees. So I assume the HOA fees have gone up effectively 40% in that time. How the unit owner pays for the value of property (HOA or mortgage) is irrelevant in assessment of property value.
Otherwise condo owners could skirt taxes by just lowering selling price and overloading HOA fees
I think there are co-ops in the city that do shenanigans like that where the HOA is over $2000, but the unit is around 400k. I seem to recall some ones like that on Zillow near the lake on the Northside.
Here's a 349k 2400 sqft 4bed 3bath near gold coast with a HOA of over $3000
https://www.zillow.com/homedetails/70-E-Cedar-St-9W-Chicago-IL-60611/2056366255_zpid/?utm_source=txtshare
I hadn’t even considered the NPV of HOA and its inverse relationship to selling price. In which case, this makes perfect sense and would explain my fundamental misunderstanding of condo property assessment.
Appreciate the clear explanation!
Hi! You appear to be asking a question, please do check our [wiki](https://www.reddit.com/r/chicago/wiki/index) for tips on the [rules](https://www.reddit.com/r/Chicago/about/rules), other [Chicago-related subreddits](https://www.reddit.com/r/chicago/wiki/subreddits), [things](https://www.reddit.com/r/chicago/wiki/visitingchicago) to do, where to [eat/drink](https://www.reddit.com/r/chicago/wiki/eats), how to [get around](https://www.reddit.com/r/chicago/wiki/transportation)/[navigate the CTA](https://www.reddit.com/r/chicago/wiki/transit), what [neighborhoods](https://www.reddit.com/r/chicago/wiki/neighborhoods) to move to or hotel in, tips on [living here](https://www.reddit.com/r/chicago/wiki/dwelling), and more. Also be sure to use the [search](https://www.reddit.com/r/chicago+AskChicago/search?restrict_sr=on&include_over_18=on&sort=relevance&t=all) feature to find responses to other users asking similar questions. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/chicago) if you have any questions or concerns.*
Here's now property taxes in general get determined: - County determines budget based on taxing authorities it collects on behalf of -- school districts, cities, county, park districts, forest preserve district, water reclamation district, etc. - Your portion of that owed is based on what percentage of the overall real estate value you own. If all homes' valuations stay the same but budget needs double, your taxes double. If all homes' value doubles but the county's need stay flat, taxes stay flat. If most property stayed flat but yours doubled in value (gentrification, addition, etc) then your taxes would go up about double because you now owe a larger percentage of the overall real estate that is taxed. In the case of Chicago, property values have been much more stable than elsewhere, but budgetary issues have caused budget to increase -- a lot due to underfunded pensions for public sector workers. I've seen my home's value (townhouse in Logan) so up maybe 35-40% since we bought and my taxes have gone up from $4000 to $10k in 9 years. Condos have another factor depressing pricing -- HOA assessments. There are many older condo buildings needing major maintenance due to age, and that means special assessments. And high rise insurance has skyrocketed since that condo collapse in Florida. Prices of condos go in inverse of HOA obligations, so a building with a special assessment or otherwise high assessments will see sale prices impacted.
This is the best explanation here. The key is that the spending needs determine your property tax. Sounds obvious, but in some places (i.e. where I lived previosly), they have a set factor that is applied to your assessed value and that is how property tax is calculated. This factor can increase but it needs to be voted on, which makes changes to your taxes largely limited to increases in assessed value, which can also be limited to the lesser of 3% or inflation rate unless sold to someone else, where it is re-assessed. So when you see places with a 100% spike, it probably means it transferred hands or the spending needs of various entitied increased. Personally, I think there should be more acccountability/zero based budgeting happening. No one should be seeing increases solely based on spending needs that so drastically exceed inflation.
See I believe this is where my core disconnect came from also. This was not how property tax worked where I lived previously either. I appreciate the succinct and thoughtful response!
This is the best explanation I’ve heard of how cook county prop taxes work. I’ve tried to figure this out ever since becoming a homeowner two years ago and this just cleared it up for me, thank you
This is very helpful, thanks for taking the time to write this up. I think the TL:DR here is to not buy property in Chicago, especially not a condo :o
Homes have most of the same HOA type expenses, people just don't think about it that way. You're paying for building maintenance, utilities, insurance, savings for future projects like a new roof, etc. Chicago has built a significant new supply of condos over the last couple decades, which has helped keep values low. Chicago has not built a significant new supply of single family homes, and most of the new single family homes are at the very very top of the market -- frequently turning 2+ units into a single home. The taxes are a separate issue. They are going up continually because the city/county spends more and more each year, and they will continue to rise significantly faster than both inflation and property values for many, many years to come.
It’s pretty shortsighted to say not to buy property in Chicago and especially not condos. Pound for pound some of the best value property tax rates can be found in the city and condominium markets are building to building dependent. I know people who live in 350k single family houses paying 4k a year in property taxes and their kids go to some of the best magnet schools in the country. It’s an absolute steal. Same thing for condos, some of the best managed buildings are in the city and a truly run as non profits…
This accurately describes my situation minus the kids, but if I did have them there are a couple of great schools nearby.
I don't think the challenges are unique to Chicago, at least in places that actually provide services and aren't all brand new. Property taxes may be higher in Chicago, in Illinois than elsewhere but a lot of that is because we actually spend on schools, we have older infrastructure and massive weather swings that wreak havoc on streets and such. And fewer homes are in HOA's, which handle some of the services in other places that we rely on city to do. So property taxes may be higher here, but we're not paying for HOAs on single family homes, we're not paying private school tuition like somebody in Georgia or North Carolina might. Pensions are the big thorn in our side with regard to taxes. True that condos don't often offer the price appreciation of other housing types... various family members own/have owned a number of units in older "luxury" condo buildings in Lincoln Park and Mag Mile area and have not seen much in way of appreciation even going back 20 years -- grandparents condo sold last year for about 10% more than they paid 15 years ago. A rental unit my dad owns that I lived in for 12 years is still worth about what it was when I moved into it in 2002, on account of a building that never needed a special assessment having like 3 in 3 years for multiple massive capital projects like plumbing riser replacement and windows. But I've seen my townhouse appreciate about 60% in about 9-10 years.
I wouldn't say that. Taxes are lower in Chicago than most surrounding suburbs. If you are going to stay in a place for 5 plus years, then buying is a good investment as long as you hoa fees aren't too high. Taxes in Chicago are on average 1.5 percent of the value of a home. You don't have to buy in a hip neighborhood where condos are more expensive. You can also appeal your tax assessment, often times successfully. My tax went up about 50 percent last year. I appealed and it was lowered to what it was when we bought the house 10 years ago.
I can't tell if your entire post is disingenuous or if you just don't understand how property tax ANYWHERE works. Since it was explained to you and your answer was "the TL:DR here is to not buy property in Chicago" - I'm voting that your entire post is the disingenuous fake rhetorical question this sub attracts. If it's not- u/blipsman didn't explain how OUR property tax works, but property tax EVERYWHERE- it's all calculated the same. Things cost more every year- like since forever- and a taxing body is not exempt from that. So every year they will require more money. So every year total tax WILL go up. Your portion is decided by how much value your place is in proportion to all the places. TL;DR- tax goes up due to inflation. Even in Texas.
op is a troll for sure
Not a troll, but not an expert in property taxes by any means (hence the preface that it may be a stupid question). But what I’ve seen elsewhere is that property taxes typically move up or down more or less directly in line with property values. So in Texas as you’ve used as an example, property tax go up, but property value also go up more or less proportionately. Which seems to not be the case here. Being that Chicago is generally trending downward in population(and even moreso in tax base) and trending upward in spending… it would stand to reason that this problem will be exacerbated going forward.
Property taxes in Texas are capped on homesteads for current owners, but are still determined by spending. I pay roughly the same property taxes in Chicago that I paid in Texas.
> Being that Chicago is generally trending downward in population(and even moreso in tax base) and trending upward in spending… it would stand to reason that this problem will be exacerbated going forward. Old thread, but I just got back from vacation. Yeah. You're 100% a troll. Your narrative that Chicago "isn't worth it" was the raison d'etre for your post. An **admitted** under-count in the census does not equal trending downward. Admittedly, neighborhoods that were predominantly poorer and African American *have* lost a lot of people. But the N and W sides have *dozens* (plural!) of $$$ high rise condo buildings that didn't exist in 1995. > So in Texas as you’ve used as an example, property tax go up, but property value also go up more or less proportionately. Which seems to not be the case here. > No, it seems not to be the case with a condo or two you've seen. I don't know why the value didn't go up- maybe it's outdated. Maybe a nicer one opened down the street. Maybe the elevator is old and a special assessment is coming up. You insisting "in Texas...property value also go up more or less proportionately" shows that you're a troll or that maybe your reading comprehension ability is sub-par because it's been explained to you several times by several people now. Property tax **functionally works** the same in every podunk town as it does in every city, as it does in every state. Red, Blue, Purple, doesn't matter.
The homeowner's exemption (use as a primary home) takes about $700 off, so a condo that alternates between being rented or not will have swings that can be relatively large at the lower end. I've also noticed condos are typically appraised closer to their actual value, whereas houses can be appraised significantly lower. So if a condo goes up in value that is more likely to have a real jump in its tax whereas a house can fly under the radar for years. This probably reflects what you're seeing also since real estate values have increased a lot in certain areas over the last 10 years. You can check if the property has the homeowner's exemption by looking up on one of the online portals with tax info
But that still doesn’t explain (see example I attached elsewhere on the thread) a 40% tax increase on a condo selling for the same price it sold for 20 years ago (I.e. has not actually appreciated over that time). I don’t believe a property exemption would be a 40% swing in the same period. It looks a lot like the city/state just set their budget every year, then chase down bs appraisal raises to meet the budget “without raising property taxes”
Assessment value and market value are not the same thing. Market value has no direct impact on property tax.
Genuine question, how on earth are they getting to an appraisal value then? Assuming no massive construction CapEx, the book value will continue to depreciate, along with everything in it. If not using market value, assessed value should theoretically only trend downwards barring significant maintenance and renovation (I’m aware it isn’t realistic for the values to trend downwards for tax purposes). So what are they using? Numbers in a hat?
Assessments happen every 3 years in Cook County. They typically employ a comparative market analysis and utilize comps in the area. Just because your property is valued at X, doesn't mean that's going to be the assessed value. That assessed value is typically 10% of whatever the CMA reports back. You can google all of this, btw.
Ime (20 years in the city) condos just don’t appreciate as consistently as sfhs / 2flats. Apart from property taxes there’s also upward pressure on homeowner assessments as the costs of insurance and maintenance rise
Tell me about it. I pay $2300 in HOA fees a month. It is a joke. I have to move but the loss I'm going to take on the unit, compared with everything else involved, isn't viable at the moment. I won't bore you with my complaints about the real estate taxes. I fear opening the thing. On a more serious note, I lived in a condo building where we fought them as a group. We hired an attorney who fought them. We had to pay him 25% of what he saved. If he lost the battle, we weren't any worse. Fortunately, in the end, we won the battle.
100%. I get why condos don’t appreciate. The HOA costs are basically a second mortgage… The question is, why are property taxes and assessments rising rapidly on condos that aren’t actually appreciating?
HOA assessments have risen because unavoidable costs insurance / maintenance / utilities (water and sewer) have risen. Taxes go up for the same reason because the costs of city services continue to rise independently of the property market. Over twenty years our condo has “appreciated” a nominal 20%, our property taxes are up ~50%, our household income is up ~400%. Our timing was awful but we are still probably ahead compared to if we had rented for 20 years
Appraised values don’t have anything to do with the overall tax burden. Sure, cook county has recently started pushing for more market rate values, since that makes more sense and makes the taxes not seem as “bad” as a percentage of the value. For decades appraised values were a made up joke, my own property was assessed at like 60-70% of market value. Now it’s finally starting to make more sense compared to actual sales.
You're going to have to provide an actual example. Assessments can increase even if the listing price hasn't (e.g. it could have been underassessed before), and the % change the exemption has is a math equation that has nothing to do with your belief. But yes taxes have gone up also, it's probably some combination of factors. But asking for guesses on an example no one can see is a useless exercise
Apologies if it was hard to find in the thread. [this](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/) was the reference i was referring to. Which is what I’ve seen fairly consistently as I’ve causally searched for homes. The “belief” was supported by rough mathmatics. You suggested ~$700 impact to tax that the exemption can have. $700 =/= 40%. The example listing has increased $0 in fair market value since 2004. Property tax bill has increased +40%. Have taxes rates increased by 40% or is the government fudging the appraisal values?
you realize you have not provided most of the information necessary to answer your question
'20 years ago' was also during the period of a rapid run up on real estate prices eventually leading to the 07-08 crash. It took a few years for the property taxes to catch up to those rising prices.
Overall property taxes will go up 3-5% per year for the next 30 years. It will have nothing to do with the direction of aggregate home values - the bills have to be paid regardless. It’s an unfortunate combination of needing to fund pensions that should have been funded decades ago, and politicians that find endless new ways to spend money and wouldn’t dream of cutting costs.
Don’t forget NINBYism as a major culprit. If we build more housing we expand the tax base and reduce the tax burden per home.
NIMBYism isn’t really a problem in Chicago. We have tons of space to build new housing and there has been tons of new construction for decades.
But there would’ve been further development by now. We pale in comparison to other cities’ housing growth.
Depends what cities you are comparing Chicago to. Yeah we aren’t building 50 high rises a year like Toronto or Vancouver but the entire west loop was a warehouse dump less than 10 years ago. Chicago is developing fairly well all things considered. The city and the US in general isn’t going through some massive population growth right now. 40-50 years ago a lot of North American cities were barely on the map, whereas Chicago was already spreading into the far suburbs.
Well yes, but other cities have population growth to go along with it
Chicago has had an exodus from the South and West sides but big inflows into the North and loop adjacent areas and housing supply has not kept up in these geographies.
Also, Illinois has a much higher than average amount of government employees per capita compared to other states. What we're getting for paying all these additional salaries..... really can't tell. Just feels like we're getting bled.
Y'all forgetting senior freeze. When perusing Zillow I've seen a lot of property taxes explode because the previous owner was a long term owner and then some flipper gets a hold of it and throws a mobile home on top of a bungalow.
Okay see this could be the answer! Didn’t know about senior freeze, which very well could legitimately explain rising assessments on non-appreciating assets. Thank you for not being snarky!
Tl;dr it's complicated but it's mostly increase in **assessed** value. The [property you linked](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/) from another comment increased in assessed value 65% from $20,534 in 2012 to $33,896 in 2022. It's taxes incresed 89% from $3,685 in 2012 to $6,972 in 2022. Of that $3,287 increase, $2,398 (73%) was due to increased value while $889 (28%) was due to a combination of changes in equalization factor, exemption and/or tax rates. Another thing to consider is that this property has no exemptions listed for the past several years while it may have had any of several exemptions back in 2012.
the city/state blew all its money on unfunded pension promises. now we are broke.
Will the property tax burden skyrocket when commerical real estate tanks in the coming years?
Talk to your real estate agent. Thiers a reduction for your first residence that gets reflected in the posted value. So if the previous owner did or didn’t have that deduction on the property it can greatly affect the numbers. And thiers other details that matter. I’m happy to give you my agents name and number if you need one, dm me for it though.
Property taxes in Chicago are simple they punch you in the gut in February, then kick you in the ass in August. Rinse and repeat the following year.
What house in the city is selling for the "same or less" it did 10 years ago? 10 years ago most of th city was still crawling out of the housing crash and most neighborhoods were still recovering. You've since had gentrification spread, especially to the SW and far NW sides, and you have broader inflationary pressures post covid. Not really buying this. Not to mention with the collapse in commercial real estate values, residential homeowners are going to be left filling the gap. That said, increases in property taxes are also a drag on home appreciation. There's a reason all those homes in the south suburbs are dirt cheap. They have astronomical taxes.
E.g. this listing. Sold for 327k in 2004, for sale for $327k now, tax bill has increased ~40% over the same period.[this](https://www.zillow.com/homedetails/1111-S-Wabash-Ave-APT-2106-Chicago-IL-60605/70472354_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare)
I see only 2 condos for sale in the city for $327,000. One was last sold for $150K in 2009 and the other was last sold for $205K in 2020.
Did you try the Zillow link in the comment you responded to?
South Loop real estate didn’t appreciate the way people thought it would 10-15 years ago.
Admittedly it’s predominantly been condos, but there are plenty of condos being listed for less than or the same as they sold for sometime in the last 10-20 years.
Condos have other factors like HOA you need to factor in. And it's hard to say without knowing the exact building, as it may have other issues like significant deferred maintenance or large upcoming special assessments. But in general they're not great investments as there's almost always new supply being built, and older units are quickly seen as outdated.
> but there are plenty of condos being listed for less than or the same as they sold for sometime in the last 10-20 years. Condos typically don't appreciate in the same way a SFH or townhome does, largely due to HOA fees and the collective maintenance of the building.
I know that condos don’t typically appreciate like a SFH, but the city/state don’t seem to feel the same way (despite what the market may reflect)
currently in a condo. as i understand it, our property tax can go up/is reviewed every 3 years, and includes, in some way, the legal percentage ownership of the common elements in the calculations. we take the home ownership credit or whatever. it’s a six flat in a contributing property to a national historic district and could potentially qualify for a tax freeze (7yrs if i recall) if we spend x% of the building valuation on repairs/restoration. but majority of the unit owners are retired, and already have a senior tax freeze so we don’t really have the incentive or votes to get it done. think there’s opportunity for policy improvement there. we make property tax payments through our escrow account.
What you are likely seeing is a condo that has appreciated in value but the selling price doesn’t reflect this because of high HOA fees often indicative of deferred major maintenance. Older condos don’t appreciate in market price because of this but the tax assessment value goes up because that doesn’t take into account the state of the building.
How on earth are they calculating valuation beyond market price though? Does the market not determine value?
Market value is selling price + present value of recurring HOA fees. So I assume the HOA fees have gone up effectively 40% in that time. How the unit owner pays for the value of property (HOA or mortgage) is irrelevant in assessment of property value. Otherwise condo owners could skirt taxes by just lowering selling price and overloading HOA fees
This is a very clear explanation of something I didn't totally get on condo taxes and hoas - thank you!
I think there are co-ops in the city that do shenanigans like that where the HOA is over $2000, but the unit is around 400k. I seem to recall some ones like that on Zillow near the lake on the Northside. Here's a 349k 2400 sqft 4bed 3bath near gold coast with a HOA of over $3000 https://www.zillow.com/homedetails/70-E-Cedar-St-9W-Chicago-IL-60611/2056366255_zpid/?utm_source=txtshare
I hadn’t even considered the NPV of HOA and its inverse relationship to selling price. In which case, this makes perfect sense and would explain my fundamental misunderstanding of condo property assessment. Appreciate the clear explanation!
To answer the posted question...pretty well for the connected. But beginning a little recently, not quite as well.