Understanding Illinois Multi-Family Property Tax Appeals

There are several different classes, or types, of property located in Cook County. Multi-unit residential properties are parcels of real estate that must be set up to accommodate several households in separate units. This can take the form of a single building with multiple units or any building structure with shared walls between units. Duplexes, high rises, rental housing, and ownership housing are all examples of multi-unit residential property.

Multi-Unit Family property tax appeal factors

Multi-unit residential appeals involve a number of factors, including capitalization rates, comparable properties, errors, new construction, operating income, tenant rental income, and vacancies.

Capitalization Rates – A “cap rate” is an estimate of an investor’s potential return on a property. The capitalization rate on a property is likely to be a profitable investment in the real estate market if it is highly reviewed by tenants and provides the sought-after amenities prospective renters. 

Comparable Properties – Comparability among properties that share a class code is based upon location, age, square footage of the building, and square footage of the owned land that surrounds the building.

Errors – Taxpayers who discover an error in their assessment can rectify it by submitting a certificate of error to their county assessor’s office. The certificate of error process can be used to adjust excessive assessments that resulted from mathematical errors, incorrect descriptions of property, duplicate assessments, and improvements that have been damaged or destroyed.

New Construction – Higher property tax rates tend to accompany newly constructed homes and buildings. Older properties in the same neighborhood tend to have lower assessments, even if they have the same square footage as a newly built property.

Operating Income – Net operating income can be either positive or negative, depending on the operating expenses of maintaining and repairing the property in question. For a multi-unit residential property, large vacancy and credit losses would subtract from the operating income. Conversely, consistent rent and fee payment from tenants would have a positive effect on the operating income.

Tenant Rental Income – This factor can be evaluated by examining the total actual income of the multifamily property.

Vacancy – Occupancy trends, the number of unoccupied units in the building, and levels of tenant rent non-payment contribute to analyses of vacancy.

Property taxes

For many multi-unit residential property owners, property taxes represent one of the largest expenses 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 duplex or a high-rise building, 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 this year.

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 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.

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