Property Tax Laws
Your property tax bill is the biggest determinant of how much you pay into your escrow account every month, and a successful property tax appeal can impact how much you pay every month. This article explains how a successful appeal can impact your escrow payments.
First, some background on escrow accounts. An escrow account’s primary purpose is to provide additional assurance to a lender that the property underlying a mortgage is protected. By requiring homeowners to pay into an escrow account, a lender can be confident that property tax bills and insurance premium are paid on time.
The amount paid into your escrow account for property taxes can vary, but there are usually three elements that are important to keep track of.
Minimum balance: This is the minimum amount required to be in the account, and is usually equal to 1/6th of your total yearly property tax bill — or two months worth of payments. If you go under this amount, your payments will increase until you are above the buffer.
Maximum balance: This is the maximum amount your lender is allowed to require in the account. This number is often set by state statute, and if your account balance goes over, you should receive a check from your escrow provider.
Monthly payment: This is the monthly payment required, which is roughly 1/12th of the total cost of your annual property tax bill.
Your escrow account servicer is required to monitor your property tax bill and adjust the required payments if your property tax bill changes. If you get a successful property tax reduction, you can expect your required payments to change the next time your tax jurisdiction uses your assessment to calculate your tax bill. Because bills are not always released immediately after a reassessment, it can sometimes take several months for the monthly payment to adjust.
If it looks like your escrow account servicer has not adjusted your monthly payments, you should contact them and let them know what the current tax bill is.Property Taxes Cook County Property Tax Laws
Property taxes are the second biggest expense owners of real estate face, after mortgage servicing. Fortunately, property owners have the ability to reduce this cost by appealing their property tax bill. This article explains how in four steps.
1. Check if you are overassessed
Your property assessment is the key factor that determines how much you pay in property taxes, because that is the value the property tax rate is applied to. The lower your assessment, the lower your property tax bill.
There are two easy ways to determine if you are overassessed. The first requires you to look at how much properties similar to yours are assessed. If a property that is identical to yours is assessed at a lower amount than yours, it's a good indicator you are over assessed. The second requires you to look at how much similar properties to yours were sold for. If the true market price is lower than the assessment, your property could be overvalued by the assessor.
2. Get the information you need to appeal
If you are confident your property is overassessed, you need to collect some additional information that is specific to your property. First, you need to figure out which of the 38 townships in Cook County your property is in. Once this is determined, check on the Cook County website when your township's appeal period opens. This information will let you know what the deadline is for submitting your appeal.
3. Determine what type of appeal to submit.
There are three types of appeals you can submit: comparable sales, lack of uniformity or economic value.
Comparable sales requires you to submit evidence that similar properties have been sold for less than your assessment.
Lack of uniformity requires you to submit evidence that similar properties are being assessed differently.
Economic value requires you to submit three years of income and expense information, but this type of appeal only applies to income producing properties.
4. Submit and wait
After you have gathered your evidence, submit it to the Cook County Assessor's Office. It's critical that you review all of the applicable appeal rules prior to submission, because failure to comply can result in an appeal denial.
Depending on the appeal backlog, it can take several weeks or months for the Assessor's Office to provide you with a decision.