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The Property Tax Cycle:

From the assessment of property to the collection and distribution of taxes takes nearly two years for most property and can be broken down into 6 steps

  1. Assessment
  2. Review
  3. Equalization
  4. Levy
  5. Extension
  6. Collection and distribution

The property tax assessment cycle begins with the creation of the assessment books and ends with the review of the assessments by the board of review.  The steps in the assessment cycle are:

  1. Assessment
  2. Review, and
  3. Equalization

Step 1 Assessment:

An Assessment involves 4 steps:

  1. Identifying the real property within a jurisdiction
  2. Listing it
  3. Appraising it
  4. Placing a value for it on the tax rolls

This value is known as the assessment and is the basis for determining what portion of the total tax burden each property owner as of January 1 will bear.  In Illinois, the statutory assessment level is 1/3 of market value, unless otherwise by law (see Section 9-145)

  • Most property is locally assessed by township and county officials.  In Cook County, the county assessor takes the primary responsibility for the assessment of property.
  • Property in Cook County is revalued once every 3 years and is broken down into different territories (south, city, north) i.e. triennial cycle
  • The assessment date in Illinois is January 1.  On that date, the assessment cycle begins for all real property which must be valued as to its condition at that point and time.
  • Taxpayers have the right to inspect property record cards and other assessment records for any property, subject to reasonable rules and regulations established by local authorities (See Section 9-30)

Step 2 and 3: Review and Equalization

  • Review and intra-county equalization are performed by the CCAO and the board of review. While both have the power to equalize, normally only one will do so.  Review at this level is generally an informal review of the assessment roll.  Formal review on a complaint by the taxpayer takes place at the board of review.
  • All assessment that have been changed from the previous assessment year must be published in a newspaper. However, only the equalization factor must be published for properties that had assessment changes due solely to equalization. 

Assessment Cycle:

  1. County Clerk: Prepares real estate books and delivers to the CCAO by Janary 1.
  2. CCAO: Meets with the township assessors and establishes guidleines.
  3. Township Assessor (excludes Cook) Values real estate as of January 1 and returns books to CCAO by June 15th
  4. CCAO:
    • Reviews assessments made by township assessors
    • Equalized assessments within county by class, by area, or by township
    • Mails changes of assessment notices to taxpayers
    • Publishes changes in newspaper
    • Delivers books to board of review by the third Monday in June
    • Prepares tentative abstract of assessment report; mails report to the department
  5. Department of Revenue:
    • Develops tentative equalization factor
    • Holds public hearing
  6. Board of Review
    • Assesses omitted property
    • Acts on non-homestead exemptions and mails to department
    • Hears complaints and makes assessment changes on any property when deemed necessary
    • Mails changes of assessment notices to taxpayers
    • Equalizes assessments within county by class or area
    • Delivers books to county clerk
    • Mails report on equalization to department
    • Makes a list of changes and gives the list to the CCAO and clerk
  7. County Clerk
    • Prepares final abstract of assessments and mails to department
    • Applies equalization factor to all local assessments
    • Totals the EAV for each taxing district
  8. Department of Revenue: Certifies final equalization

 

Budget and Levy Cycle: 
While the property tax assessment cycle determines the allocation of the tax burdern among property owners, the budget and levy cycle determines the total amount of property tax to be allocated to the property owners.  3 steps in the cycle

  1. Levy
  2. Extension, and
  3. Collection and distribution

Step 1 Levy

  • Cycle begins in the fall of the assessment year when ost boards of review are still in session. At this time, taxing districts have generally determined their budgets for the next fiscal yea and have held a public hearing on the budget.  Taxpayers who are concerned with the amount of property tax istributed to taxing districts show attend these public hearing and voice thei opinions concerning ho much money will be needed from the property tax.
  • After the budget is approved, the taxing districts can then calculate the amount of revenue needed from the property tax. This amount is certified to the county clerk as the property tax levy.  The amount levied is the amount that taxpayers will pay on their property tax bills in the following year.

Step 2 Extension: Extension is a two-step process that includes the computation of tax rates and the application of those rates to the EAVs of the individual parcels of real estate. 

  1. Tax Rates are computed by dividing a taxing districts levy by the total EAV of all parcels of property in the taxing district. 
  2. The second step the individual tax bills are extended in the collectors book by multiplying the EAV of each property by the sum of the tax rates for all districts in which the property is located.  This sum is called the aggregate tax rate that would include rates for the county, township, school district, and municipality, park district, fire protection, library, etc.

Step 3: Collection and distribution:

  • The county treasurer prepares a property tax bill for each property listed in the collectors books. One the treasurer begins receiving money from either installment, he distributes the monies to the appropriate taxing district.
  • Soon after September 1, the county treasurer prepares a list of properties for which taxes have not been paid. This delinquent tax list is published in a newspaper and notices are sent to the owners of the properties.  These notices specify that the treasurer will apply to the circuit court for judgement against property.  If the taxes remain unpaid, the court will order a lien to be sold at the tax sale in the amount of the unpaid property taxes, interest, penalty, and fees
  • The tax sale usually occurs in late October. A lien on the property is sold through a bidding process in which bidders, also called tax buyers, state the percent of interest for which they are willing to purchase the lien, starting at 18 percent and going lower until the lowest bidder purchases the lien.
  • Once the lien is sold, the property owners may redeem it by paying to the county clerk the amount of the lien, interest, penalty, and fees. The amount of the lien and interest is then paid by the county to the tax buyer, who must surrender the certificate of purchase.  A tax buyer may eventually obtain a tax deed for the property if the tax lien is not redeemed.