Taxes May Be Inevitable for Property Owners ... But Tax & Assessment Surprises are NOT

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/5jpk

  

 

Taxes May Be Inevitable for Property Owners ...

But Tax & Assessment Surprises are NOT 

 

   

“Tis impossible to be sure of anything 

but Death and Taxes.”

                        Christopher Bullock, an English actor, and dramatist, 1716   

 

 


For property owners in Will County, IL, the inevitable ... the receipt of a real estate tax bill ... has once again occurred.  

 

Tax Bills for the County were put in the mail on Friday, May 3rd, 2019, and should, by now, be in most property owner's possession.   


This event and the reaction to it on many social media venues remind me that real

estate taxes and their payment remain a very big deal to homeowners.  Property taxes and property assessments affect most in many ways, big and small.  


Because of that, becoming thoroughly informed and educated about property taxes ... plus property assessments, taxing bodies and taxing systems ... is important.  


Property owners need to know: 

 

  • How much their taxes are
  • How their real estate is assessed 
  • When their real estate is assessed
  • How their taxes are calculated
  • What their tax rates are
  • Where and how they pay their taxes 
  • Should they have a Tax Escrow via their monthly mortgage payment, they need to verify that a copy of the tax bill was received by their Lender/Service Provider ... and paid
  • When both tax installments are due 
  • Should they wish to protest their assessment, they need to know how to start and navigate that process
  • More ...

 

It's also important for property owners to know:  If you're thinking your property tax bill is too high, you must focus on your property assessment, as it is the assessment of your property that you must appeal ... not the tax bill.  

Once you're in receipt of your actual tax bill, it's already too late to protest your Property Assessment for that levied year.  (Errors of fact, however, can be corrected after you've received a tax bill.)  

 

Any appeal filed must be conducted within 30 days of the receipt of your Assessment Notice.  In Will County, when new assessments are completed they are typically mailed and published in August.  They can also be found on the Will County Supervisor of Assessment's website.

 

Of special note for those considering a new construction home purchase now or in the future ...  

 

It's important that you pay close attention to the topic of real estate taxes as your taxes will "evolve".  What do I mean?

 

Most borrowers are required to establish an escrow account at the time of loan.  Their escrow account includes their real estate taxes.  In most cases Insurance, Mortgage Insurance, Flood Insurance, etc. payments are also included in the escrow account.  As borrowers make each monthly mortgage payment, their escrow account builds.  

 

Typically the real estate tax portion of the escrow account is based upon the last available tax bill for that property ... one which was calculated on vacant property.  As a result, the first tax bill received by new construction owners is minimal.  

 

And subsequently, the Mortgage Escrow Account set-up at the time of the Mortgage Closing has been funded each month by escrow payments based on that low vacant property tax bill.  (Mortgage Originators  are required to base tax escrow figures upon the most recent tax bill available.  They're prohibited from collecting anything beyond that.)

 

But once the Assessor acknowledges the sale of that property into a completed  home, the property assessment is back-dated to the date of Closing.  This back-dating typically results in a much larger tax bill due during the second year of ownership.  

 

As a result, many new construction homeowners are caught off-guard upon the receipt of this 2nd larger tax bill and find themselves short on saved tax escrow funds because of it.  That often results in them scrambling for funds ... or telephone calls to their LO.

 

Because of that, I always stress to my new construction buyers/borrowers that it's important to: 

 

  • Gain an thorough understanding of how taxes work prior to buying any new construction home
  • Make sure you know what your projected (fully-assessed)  taxes will be on the home you're buying/building prior to signing a Contract
  • Plan and prepare ahead for the receipt of the larger tax bill coming (typically in the 2nd year of occupancy)

 

While Will County Homeowners/Borrowers with escrow accounts are given notice by the County when taxes are due, it's the Mortgage Lender (or the loan servicer) that pays the tax bill installments out of the monies saved in their escrow account.  This is normally a seamless process, but borrowers should verify that their tax payment was successfully made upon its due date.

 

Possessing a working command of the taxing and assessment processes and the terminology used regarding them definitely helps property owners in many important ways.  

 

So to assist in that regard, I've put together a handy list of some of the most commonly heard/used tax and assessment terms below.

 

Property Tax and Assessment terminology:   

 

  • Property Tax - The local tax on the value of real property, land, buildings, and homes
  • Tax Rate - The amount of tax due stated in terms of a percentage of the tax base within a certain tax code
  • Equalization Factor - A factor that must be applied to local assessments to bring about the percentage of increase or decrease that will result in an Equalized Assessed Value equal to one-third of the Market Value of taxable property in a jurisdiction
  • Equalized Assessed Value - The fair market value multiplied by the State-Certified Equalization Factor. Tax bills are calculated by multiplying the Equalized Assessed Value, minus any exemptions, by the tax rate
  • Market Value - The most probably Sales Price of a property in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressures
  • Taxing Body & Tax District - A local governmental unit that levies a property tax. Examples: Park District, Fire Protection Districts, Municipalities, School Districts, Library Districts, etc.
  • Exemption - Freedom from the property tax granted to the property in recognition or because it is taxed either directly or indirectly by other means. Example of Exemptions: Homestead, Military Veterans, Senior, Disabled, Home Improvement, Energy, Etc.
  • Assess - To place a value on property for tax purposes
  • Assessed Value - An Assessed Value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation is the price placed on a home by the corresponding government municipality.  It  determines the value of a residence for tax purposes. 
  • Assessor - The government official responsible for establishing the value of a property for tax purposes
  • Board of Review - A panel of three residents of a county, experience in real estate appraisal, who review complaints filed by individual taxpayers. The Board of Review has specific statutory responsibilities to perform during a designated period of time
  • Ad Valorem Property Tax - A tax imposed on the basis of value.
  • Improvements - The value of any buildings or structures existing on land, whether new or old. Improvements may also include certain commercial and industrial fixtures. 
  • Property Index Number - Every parcel of property is assigned a permanent index number, also referred to as PIN. Permanent index numbers are 14 or 16 digits and define the location of your property. Your PIN is located on your tax bill
  • Appraisal - The act or process of developing an opinion of value; an opinion of value. An appraisal must be numerically expressed as a specific amount, as a range of numbers or as a relationship (e.g. not more than, more than, not less than, less than) to a specified amount 
  • Assessment Protest - An assessment appeal or "protest is the due process a taxpayer may initiate if the assessed value of his or her property cannot be agreed upon with the county assessor. It is a legal process in which a property owner contests a value or assessment either formally or informally on taxable real or personal property. For each year, there are specific statutory dates when an appeal can be made. In Will County, you have 30 calendar days from the date of the notice to file your appeal with the Will County Board of Review. The process should start with contacting your Township Assessor.  Your Assessor can provide you the info and forms you need to start your appeal/protest   
 
Will County property owners should remember, Will County Taxes are due on the following dates:
 
  1. 1st Installment is due June 4, 2019 
  2. 2nd Installment is due September 4, 2019
 
Yes, taxes are inevitable if you are a property owner.  But careful and consistent planning and preparation insure that tax surprises are not.
 
Although information and guidance is readily available via local municipalities and government offices and websites, always feel free to contact me with your questions.  I'll be happy to hear from you, answer questions, and be of assistance.
 
 
 
* When in need of  Mortgage info or service when buying, refinancing, or  investing in a home in New Lenox - or elsewhere in Chicagoland - IL & WI, contact me

I'll be happy to put my 40+ years of mortgage experience and
expertise hard to work on your behalf.
I'm easily found at: 
 
 
Gene Mundt
 
Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed
 
American Portfolio Mortgage Corp.
 
 
NMLS #175656
 
 
 
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Sally K. & David L. Hanson 05/15/2019 09:47 AM
Topic:
Real Estate General Information
Location:
Illinois Will County
Groups:
Mortgages
Chicago Area Real Estate BUZZ!
Consumer Mortgage Tips
Bananatude
WillCounty
Tags:
property assessments
tax escrow
tax bills
will county property taxes
real estate tax payment
new construction taxes
real estate tax assessment glossary

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Rainmaker
1,823,199
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - the information is so important when you buy your home or do a renovation.

May 15, 2019 09:45 AM #1
Rainmaker
2,933,125
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Gene... a very contentious subject when it comes to home ownership. Everyone thinks their taxes are too high regardless of where they own. And because I sell in two states and in half a dozen counties regularly, it's a job staying on top of some of the major tax issues in all of these places.

May 15, 2019 10:51 AM #2
Rainmaker
3,482,999
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good afternoon Gene. You have done a great job with this. I congratulate you on the feature.

May 15, 2019 11:48 AM #3
Rainmaker
1,214,147
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Okay ... I have tried .. tried .. and tried again ... multiple times ... to fix this post so it looks good.   I've failed and I'm giving up.  My apologies to all ...

Gene

May 15, 2019 05:23 PM #4
Rainmaker
608,303
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

Sometimes its like putting a square peg in to a round hole It just wont work

Active Rain has moments that just cannot be explained...

your words are clear and well thought out....Message Received

graphics and format are just not allowed today by the AR Gremlins

May 16, 2019 01:13 AM #5
Rainmaker
1,385,568
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Very thorough information on taxes in Will County. I'm sure home owners (and to-be home owners) in the area will get a lot of use out of this post!

May 16, 2019 03:58 AM #6
Rainer
485,848
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Gene,

In principle, our counties work in a similar way with different dates and one additional opportunity for appeal. As soon as you purchase your home, you have 30 days to complain. Otherwise, you have to wait until the next tax assessment. If you purchased for less than the assessed value and have an appraisal in hand, this would be a good argument for lowering the tax value. The process can take a year or so until the hearing, so good to get started right away.

May 16, 2019 06:33 AM #7
Rainmaker
278,568
Shirley Coomer
Keller Williams Realty Sonoran Living - Phoenix, AZ
Realtor, Keller Williams Realty, Phoenix Az

Great post.  I haven't seen anyone be successful in disputing their taxes.  Fortunately not too many have found it necessary but homeowners need to pay attention to their taxes, even if they have an escrow account.  If their taxes go up, they will likely find their mortgage payment increases and will wonder why!

May 16, 2019 07:01 AM #8
Rainer
210,238
Greg Mona
Faira Homes Corp - Scottsdale, AZ
Real Estate in the 21st Century!

Thank you for your very thorough post, Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  This is indeed something most homeowners (and agents/brokers for that matter!) don't know a lot about nor pay much attention to. And sometimes you do get an assessed value that is too high. While it is daunting to fight it, if you do your homework and can present the facts in a concise manner, you can get the value reassessed. Like most things in life, tenacity wins the day.

May 16, 2019 07:14 AM #9
Rainmaker
2,413,309
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I got into it with the assessor one day and appealed his ruling. He called me and we talked about comps and the condition of the property. We then agreed to an assessment amount. I canceled my appeal accordingly. Yes to this subject. The taxman is still out there and this posting says so...

May 16, 2019 09:51 AM #10
Rainmaker
4,271,926
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Gene,

This is another one of your great informative posts.  I am so glad it was featured, I am just catching on my. reading, and this is a real good one. A

May 16, 2019 09:52 AM #11
Rainmaker
492,826
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Quite often I have clients ask me for comps to fight their tax assessments...

informative p ost

May 17, 2019 09:23 AM #12
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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