real estate tax appeals: schoenberg, finkel, newman and rosenberg, llc
TRANSCRIPT
Real Estate Tax AppealsReal Estate Tax Appeals
Schoenberg Finkel Newman & Rosenberg, LLCSchoenberg Finkel Newman & Rosenberg, LLC
Home Sweet HomeHome Sweet Home -- --
As a buyer sees it --As a buyer sees it --
As a lender sees it --As a lender sees it --
As an appraiser sees it As an appraiser sees it ----
As the Assessor Sees it -- As the Assessor Sees it --
TAX =TAX = ASSESSED VALUEASSESSED VALUE
XX
EQUALIZATION EQUALIZATION FACTORFACTOR
XX
TAX RATETAX RATE
TAX =TAX = ASSESSED VALUEASSESSED VALUE
XX
EQUALIZATION EQUALIZATION FACTORFACTOR
XX
TAX RATETAX RATE
Equalization FactorEqualization Factor
Also called the Also called the “Multiplier”“Multiplier”
makes actual level of makes actual level of assessment 33% assessment 33%
based on sales ratio based on sales ratio studiesstudies
Transfer Tax DeclarationTransfer Tax Declaration
Illinois Department of Revenue Illinois Department of Revenue (IDOR) compares assessments to (IDOR) compares assessments to actual sales pricesactual sales prices
e.g. 333,333 assessed valuee.g. 333,333 assessed value÷ $1,000,000 sale÷ $1,000,000 sale== 33% assessment level33% assessment level
SO MULTIPLIER = 1SO MULTIPLIER = 1
If level of assessment too low, If level of assessment too low, (less than 33%)(less than 33%)
then multiplier > 1then multiplier > 1
If level of assessment too high, If level of assessment too high, (more than 33%)(more than 33%) then multiplier < 1then multiplier < 1
If level of assessment If level of assessment just rightjust right,,
(equals 33%)(equals 33%) then multiplier = 1then multiplier = 1
Tax Rate =Tax Rate =
tax levy tax levy ÷÷
Total Assessed Value of all Total Assessed Value of all property property
in tax districtin tax district
If you reduce your assessment, If you reduce your assessment,
Don’t Don’t brag !brag !
the tax burden if shifted to the tax burden if shifted to everyone else . . . everyone else . . .
PTELL – PTELL – 5% CAP ON TAX RATE 5% CAP ON TAX RATE INCREASESINCREASES
Property Property Tax Tax ExtensionExtensionLimitationLimitationlawlaw
Assessed Value =Assessed Value =33% of market value33% of market value
UnlessUnless . . . . . .
you live in you live in
Cook Cook CountyCounty
Cook CountyCook County is is
Special !Special ! Commercial propertyCommercial property
assessed value = assessed value =
25% of market value25% of market value
Residential / vacant propertyResidential / vacant propertyassessed value =assessed value =
10% of market value10% of market value
Illinois Illinois ConstitutionConstitutionIllinois Illinois ConstitutionConstitutionArticle IX – Article IX –
highest property highest property classificationclassification
Cannot exceed 2-1∕2 times Cannot exceed 2-1∕2 times lowest classificationlowest classification
(e.g. 10% x 2.5 = (e.g. 10% x 2.5 = 25%)25%)
Exemptions --Exemptions -- HomeownersHomeowners Senior CitizensSenior Citizens Senior FreezeSenior Freeze Home ImprovementHome Improvement Long-time homeownerLong-time homeowner Disabled personDisabled person Disabled VeteranDisabled Veteran Returning VeteranReturning Veteran
Lack of UniformityLack of Uniformity
Illinois Constitution Illinois Constitution Article IXArticle IX
-- Right to -- Right to
Uniformity of Uniformity of AssessmentAssessment
Assessment Equity Assessment Equity Comparison TableComparison Table
Address Age Class Area
(Sq. Ft.)Improvemen
t AV
MV of
building(Sq. Ft.)
Distance(miles)
09-21-404-030 1334 Lundergan Avenue 47 2-34 1,667 38,965 $146 1.17
09-22-111-004 1433 Good Avenue 47 2-34 1,585 37,668 $149 1.10
09-27-210-056 1701 Marvin Parkway 48 2-34 1,598 38,973 $152 0.36
09-27-211-017 807 Wilkinson Parkway 52 2-34 1,580 38,267 $153 0.02
09-26-116-040 640 N Greenwood Avenue 43 2-34 1,438 35,407 $154 0.65
09-27-211-016 809 Wilkinson Parkway 47 2-34 1,596 39,950 $156 0.02
Average $152
Subject Property
09-27-210-xxx Wilkinson Parkway 45 2-34 1,428 39,451 $173
Sample Calculations --Sample Calculations --Sq. Ft. of Building:Sq. Ft. of Building: 1,428 1,428
Average ImprovementAverage ImprovementMarket Value of Comparables: Market Value of Comparables: x $ 152 x $ 152 per Sq. Ft. per Sq. Ft.
Correct Improvement Correct Improvement Market Value:Market Value: $ 217,056$ 217,056
– Rate of Assessment:Rate of Assessment: x 16 % x 16 %
Correct Improvement Correct Improvement – Assessment:Assessment: 34,729 34,729
Land Assessment: Land Assessment: + 9,621 + 9,621
Correct Total Assessment:Correct Total Assessment: 44,350 44,350
ValuationValuation
Cost ApproachCost ApproachIncome Capitalization Income Capitalization ApproachApproach
Sales Comparison Sales Comparison ApproachApproach
Income ApproachIncome Approach
Market Value =Market Value =
Net IncomeNet Income
÷ ÷
Capitalization RateCapitalization Rate
Sample Capitalization Sample Capitalization AnalysisAnalysis
$118,236$118,236 Potential Gross Income (PGI)Potential Gross Income (PGI)- 11,824- 11,824 Vacancy Factor (10% of PGI)Vacancy Factor (10% of PGI) 106,412106,412 Effective Gross Income (EGI)Effective Gross Income (EGI)- 42,648- 42,648 Average Expenses (40% of EGI)Average Expenses (40% of EGI) 63,76463,764 Net IncomeNet Income÷ .1368÷ .1368 9% Capitalization Rate plus tax load **9% Capitalization Rate plus tax load ** $466,111$466,111 Market ValueMarket Valuex 22%x 22% 102,544102,544 Assessed ValueAssessed Value
** tax load = (level of assessment)(tax rate)(multiplier)** tax load = (level of assessment)(tax rate)(multiplier)
Sales comparisonSales comparisono Proximity / LocationProximity / Locationo Style of ConstructionStyle of Constructiono Size (Above Ground Living Area)Size (Above Ground Living Area)o AgeAgeo Land AreaLand Areao FeaturesFeatures
o FireplacesFireplaceso Garage SpacesGarage Spaceso Pool Pool o Deck or Patio, etc.Deck or Patio, etc.
AppraisersAppraisers SRA (certified residential appraiser)SRA (certified residential appraiser) SRPA (more advanced appraiser)SRPA (more advanced appraiser) MAI (member of appraisal institute / MAI (member of appraisal institute /
highest demarcation)highest demarcation)
Appraisers are capable of adjusting Appraisers are capable of adjusting for differences between subject for differences between subject property and property and
comparable properties comparable properties
research tools:research tools:
Government websitesGovernment websites Assessor’s officeAssessor’s office Multiple Listing Service (MLS)Multiple Listing Service (MLS) Private websites (e.g. Zillow)Private websites (e.g. Zillow)
The Appeal The Appeal ProcessProcess Assessor Assessor Board of Review Board of Review
(aka Supervisor of (aka Supervisor of Assessments)Assessments)
Property Tax Appeal BoardProperty Tax Appeal Board Circuit CourtCircuit Court
Taxpayers Taxpayers Beware !Beware !• Board of Review appeals are Board of Review appeals are
generally due within 30 days of generally due within 30 days of notice of reassessmentnotice of reassessment
• By the time you receive your tax By the time you receive your tax bill bill
it is too late !it is too late !
Assessor Assessor QualificationsQualifications
Frankfort Township Frankfort Township Assessor:Assessor:
Joseph Kral, Joseph Kral, C.I.A.O.C.I.A.O.
CIAO !CIAO !
C.I.A.O.C.I.A.O. means meansCertified Illinois Certified Illinois Assessment OfficerAssessment Officer