Your commercial property tax bill can significantly impact your bottom line. In Illinois, these taxes depend on two factors: the local tax rate and your property’s assessed fair market value. If you believe your assessment is too high, you have options to challenge it.
Understanding the assessment process
Illinois county officials determine fair market value using one of three approaches. They might analyze recent sales of comparable properties in your area. Alternatively, they could calculate the cost to rebuild your property, plus the land value. A third method estimates the income an investor would reasonably expect from your property.
Cook County reassesses properties on a rolling three-year cycle. Other Illinois counties undergo general assessment updates every four years. Valuations can be adjusted annually based on local market factors. Outside Cook County, your property’s assessed value is legally set at 33.33% of its fair market value. Your actual tax is calculated by multiplying the final equalized assessed value by your local tax rate.
Steps to appeal your assessment
To dispute your property’s valuation, you must file an appeal with your county Board of Review (following an optional or required local assessor review depending on the county). Once the Board of Review issues its final decision, you have 30 days to escalate the matter to the Illinois Property Tax Appeal Board (PTAB).
You might have several valid reasons to appeal. Perhaps the assessment relied on incorrect property information. Maybe similar properties nearby received significantly lower valuations. Or if your property generates rental income, a higher-than-normal vacancy rate might justify a lower assessment.
When appealing to the PTAB, consider getting an independent appraisal. An appraiser can provide a thorough analysis of your property’s fair market value as of the assessment date. However, the PTAB will expect your appraiser to testify in person. They must also present detailed supporting information. A simple opinion letter without proof carries little weight.
Protecting your investment
Successfully challenging an inflated assessment can save you thousands of dollars annually. The PTAB can lower your property’s value for the entire assessment period if they agree with you.
Given how complex these proceedings can be and the money you could save, seeking legal help may be worth considering. With proper legal guidance, you could navigate this process effectively.