Tax bill seems too high to new owner
Q. We purchased our new home (our first) a few months ago. It was just before the real estate tax bill came out. We are in Lake County. The new tax bill is much higher than the 2013 tax bill. We have two questions. One, as we did not get enough money from our seller to cover the 2014 bill, can we go back and request they pay the full amount and two, is there anything we can do to lower the taxes? Thanks for your help.
A. Being that you closed prior to the 2014 bill coming out, you likely received a credit for 105 percent of the last known tax bill, which was the 2013 bill. There are numerous circumstances which would account for the spike in the bill, most related to an increase in the assessed valuation of the property.
Your tax bill is comprised of three components, assessed valuation, multiplier and tax rate. Tax rates and multipliers generally don't fluctuate much. Significant leaps in tax bills are almost always related to increased assessed valuation.
Check the Lake County assessor website to determine if there was an increase in the assessed valuation from 2013 to 2014. If there was, multiply the difference by the tax rate (found on your tax bill) and that will probably account for the tax increase.
What causes increases in assessed valuation? The most common is the result of the township assessor determining that your property is worth more now than when the property was last assessed. Assessors publish the assessments during the summer or fall of the tax year. That assessment determines the tax you pay the following year. Real estate taxes are paid a year behind. This year, we are paying 2014 real estate taxes. The 2014 assessment was done in the summer or fall of 2014.
Once the assessments are published, the property owner generally has 30 days to file a complaint disputing the assessment. Absent filing a complaint or otherwise resolving the issue with the township assessor, the assessment stands and the property owner pays the bill resulting from that assessment.
Another common reason the assessment would spike is the loss of a tax exemption or other tax "benefit." One of the most common is the senior exemption. Another possibility (and potentially far more significant) is the loss of a senior freeze. Under certain circumstances, seniors can "freeze" their assessments. If you purchase a piece of owner occupied property from a senior that has had the freeze in place for many years, the loss of the freeze results in a drastic rise in the assessed valuation and hence, a drastic rise in the tax bill.
Many attorneys, when representing buyers, insist that the tax prorations be calculated without any of these exemptions or freezes unless the seller can establish the benefit will apply through the date of closing. Sometimes, the senior will fail to file paperwork that would continue the benefit and in some instances this can be corrected and the assessed valuation reduced for the current tax year.
In response to your questions, as a general rule, tax prorations are final. Unless the seller failed to comply with a provision in the contract, you are probably stuck with the full bill. Talk to a real estate attorney to determine if there is a basis to make a claim against the seller.
In regards to lowering your tax bill, look for the assessment notice, which, if it hasn't been issued already, should be arriving within the next couple months. You can contact the township assessor to determine when the assessment for your township will be issued. Remember, you have 30 days to contest the assessment once it is published. When it arrives, multiply your assessment by 3. This is the number that your assessor is claiming your property is worth. If that number exceeds what you paid for the property, you probably have the basis for a reduction.
• Send your questions to Attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to firstname.lastname@example.org or call (847) 359-8983.