In Illinois, property taxes are calculated by multiplying your property’s assessed value by a state equalization factor, then applying the local tax rate. The assessed value is typically one-third of your home’s market value, and the final bill reflects the funding needs of local governments like schools, municipalities, and park districts.
If you live in Cook County, you’re probably already aware of the significant financial impact property taxes have on homeowners in our area. Property taxes in Illinois consistently rank among the highest in the nation, often exceeding 2% of a home’s market value—especially in areas like Arlington Heights and Cook County.
A recent tax analysis by the Cook County Treasurer revealed that property taxes have steadily increased every year since 1994. That’s over 30 years of property tax hikes. Are home values really increasing that much in Chicago, Arlington Heights, and the surrounding communities?
While your home’s value plays a substantial role in determining how much you’ll pay in property taxes, it’s not the only factor that’s important.
How Your Property Tax Bill Is Calculated in Cook County
Calculating your property taxes involves three parts: the property valuation, the equalization factor, and the calculation of local tax rates. Here’s a breakdown of each component.
Assessed Value
The assessed value of your property is typically based on recent comparable sales in your area. County or township assessors consider property-specific features like lot size, square footage, and any structural improvements when determining this value. In most Illinois counties, properties are reassessed on an annual basis, but in Cook County, assessments follow a triennial cycle. This means your property is reassessed once every three years, depending on the township rotation.
Equalization Factor
The equalization factor, also known as the state multiplier, is applied to ensure uniformity in assessments across Illinois counties. If a county’s average assessed values fall below market trends, the Illinois Department of Revenue increases the factor to bring them in line with statewide levels. Conversely, if a county’s assessments are high relative to market value, the factor may be adjusted downward. This mechanism is designed to equalize the tax burden across jurisdictions with different valuation practices.
Local Tax Rates
Once your property’s equalized assessed value (EAV) is established, local tax rates are applied to calculate your actual tax bill. These rates are determined by the funding needs of local taxing bodies, which may include school districts, municipalities, park districts, and libraries. The rates are expressed per $100 of EAV and are itemized on your property tax bill, showing how much each local entity contributes to your total tax liability.
The Basic Formula for Calculating Property Taxes
Illinois uses a straightforward calculation for property tax bills:
Assessed Value × Equalization Factor × Tax Rate = Tax Bill
- Assessed Value (AV): Determined by your county/township assessor—typically 33⅓% of the market value.
- Equalization Factor: An annual multiplier set by the Illinois Department of Revenue to even out assessment disparities across counties.
- Local Tax Rate: Sum of rates from all taxing bodies—school districts, churches, villages, etc.—levied per $100 of equalized assessed value (EAV).
Example Calculation
For a $300,000 home in a county assessed at 33⅓% with an equalization factor of 1.0 and a combined tax rate of 8%:
- AV = 300,000 × 0.3333 = $100,000
- EAV = 100,000 × 1.0 = $100,000
- Tax = 100,000 × 0.08 = $8,000
Your actual tax bill could be higher if the equalization factor or tax rates exceed 1.0 or 8%.
Why Lower Assessed Values Don’t Mean Lower Taxes
Illinois sets property taxes based on total revenue needs, not individual property values. If average assessments in your county drop uniformly, tax rates may rise to compensate. So, even if your assessment decreases, your tax bill might stay flat or increase.
Property Tax Exemptions Also Play a Role in Determining Your Tax Bill
- General Homestead Exemption
- Senior Citizen Exemption
- Senior Assessment Freeze
- Disabled Persons’ Exemption
- Veterans’ Exemption
If you think you might qualify for one of these exemptions, check with your county assessor to apply. Not all are automatic.
At the Law Offices of Roger W. Stelk, we offer clear, practical legal insight to help you understand your real estate costs.
If you have any questions about real estate taxes or buying or selling real estate in Illinois, feel free to contact the Law Offices of Roger W. Stelk at 847-506-7330.
