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Understanding Commercial Property Tax Appeals

Commercial properties account for one of several different classes, or types, of property in Cook County. In order to be considered commercial property, a parcel of real estate must be used for business activities.

Commercial property is often a building that houses office or retail space. It can also be land, a garage, hotel, theatre, gas station, shopping center, commercial greenhouse, or any other space with a for-profit function

How are Cook County commercial property tax bills calculated?

Commercial property valuation in Cook County is complex and involves multifaceted methods. According to the Cook County Assessor’s website, the fair market value of a property is calculated using multiple sources of market data. As stated on the website: “our analysts use multiple data sources to find market ranges of information like rents, vacancy rates, expense rates, and cap rates of similar income-producing properties, in and around its neighborhood.”

What exactly is market data?

According to the Cook County Assessor’s website: “CoStar, Trepp, CBRE, Cushman and Wakefield, JLL, and other professional market data providers” function as primary sources for the research. “Qualitative interviews with local brokers, appraisers, and building owners” provide supplementary insight during the research stage.

How does this research translate into fair market values?

The Cook County Assessor’s Office does not appraise each individual property. A system of mass appraisal is used to produce property values by detecting local trends in property values based on the performance of their location and characteristics in the real estate market.

According to the Cook County Assessor’s website: “Those trends are used to estimate the fair market value of each property based on its location and characteristics.” Appraising properties in clusters, rather than one by one, generates more congruent appraisals.

How do commercial property tax appeals differ from residential appeals?

Commercial property appeals consider market value, but they are not based on this factor alone. The elements of income and cost are also examined. By contrast, residential appeals are based largely on the market value of the property. Commercial property assessments must account for the profitability of business operations on the premises measured against substitution and depreciation.

For many commercial property owners, property taxes represent the largest expense in owning real estate. In recent years, Illinois property tax bills have been rising at a seemingly exponential rate. However, unlike other costs intrinsic to owning property such as mortgage payments or utility bills, tax assessments can and should be appealed.

Whether you own a shopping center, gas station, commercial greenhouse, or a condominium building with a retail storefront, you should consider appealing your property taxes. An attorney can assist at every step of the process to boost your chances of a significant reduction.

Property taxes unappealing? We can help!

Appealing your property taxes is one way to ensure that the amount you pay is fair whether you live in the north/northwest suburbs, south/southwest suburbs, or in the City of Chicago.

At present, Illinois is second only to New Jersey with the highest effective property tax rates in the United States. A 2020 study found that some Chicago area homeowners pay twice the national average in property taxes for a similarly valued home. Moreover, property tax hikes are slated for 2021.

Appeal.Tax can prepare your property tax appeal and handle it from start to finish. We understand local appeal procedures to help homeowners avoid being overburdened with property taxes.

Appeal.Tax has no fee unless a reduction is obtained. And we only charge a small portion of the overall tax savings secured. 

Since 2015, we’ve saved Illinois property owners over $100 million in reduced property taxes.

Contact Appeal.Tax today to discuss your Association, residential, or commercial property tax appeal. Tax Attorney Timothy Jacobs can be reached at 847-777-7270 or tjacobs@ksnlaw.com.