Glen Ellyn vs La Grange - need Lookout Kid, Chet and JJSki's advice (Naperville: mortgage, credit)

[chet everett]

Originally Posted by WannaBeinBoston

Holl1ngsworth, good to know. Can you opine on varying taxes for different properties, around the lake and downtown. I'm looking at one on Hillside (south of track but within a few blocks of downtown, and tax bill for 2015 is 16k, priced at 867k. Then there's one priced at $799k on N. Park north of downtown, and 2015 tax bill is $25k. I don't get it.

The township assessor tends to allow existing homes that have changed hands to gradually come up to market price over a few years. For homes that have have not been sold in a long time that means that the sellers might have been getting quite a little bargain. For buyers that are smart they will factor the "worst case" into to their offer so that they are not scrambling to pay taxes that very likely will rise.


The other factor is that assessor tends to adjust homes that have nearby sales more frequently than areas that have less frequent sales.

The bottom line is that $25K is a whole lot closer to reality on $800k than $16k on $870k and you ought to budget for something OVER 3% to be realistic...

[Lookout Kid]

Originally Posted by WannaBeinBoston

Holl1ngsworth, good to know. Can you opine on varying taxes for different properties, around the lake and downtown. I'm looking at one on Hillside (south of track but within a few blocks of downtown, and tax bill for 2015 is 16k, priced at 867k. Then there's one priced at $799k on N. Park north of downtown, and 2015 tax bill is $25k. I don't get it.

The assessor is supposed to base his assessment on "Market Value", so I'm not sure what the convergence is about here. From the Milton Township Assessor's website:

"The appraisal of the property is made by using all of this data to apply the three commonly used approaches to value; Cost, Income Capitalization and Sales Comparison Approach. The three estimates of value are then tempered by the Assessor's experience and judgment into a final estimated value.
The basis for all assessments and reassessments is Market Value (occasionally the terms "full value" or "fair cash value" are used. According to Illinois State law, all property in Illinois (except Cook County) should be assessed at 33.33%, or one third of Market Value. This is known as the level of assessment. For example, if a home could be sold for $330,000, the Assessed Valuation would be approximately $110,000 ($330,000 x 33.33%). Once the Market Value of a property is determined, the Township Assessor places the value of the property at the required percentage which results in the Assessed Valuation.
The Assessed Valuation is the base which other county, city, township, and village officials use when they determine property taxes."

[Lookout Kid]

If you have the property's address, you can look up what the "Full Cash Value" was in 2014 here (go to the "Property Tax History" tab):

DuPage County IL Official Website - Property Lookup Page

If the Full Cash Value is considerably lower than the sale price, you might expect to see an increase in taxes. You can also see what exemptions the sellers were claiming. But note that I am seeing a lot of properties in my area that are assessed a full $100k less than what they actually sold for recently. It seems like the assessor is being cautious about rising values.

[holl1ngsworth]

Originally Posted by chet everett

The township assessor tends to allow existing homes that have changed hands to gradually come up to market price over a few years. For homes that have have not been sold in a long time that means that the sellers might have been getting quite a little bargain. For buyers that are smart they will factor the "worst case" into to their offer so that they are not scrambling to pay taxes that very likely will rise.


The other factor is that assessor tends to adjust homes that have nearby sales more frequently than areas that have less frequent sales.

The bottom line is that $25K is a whole lot closer to reality on $800k than $16k on $870k and you ought to budget for something OVER 3% to be realistic...

The median tax rate (median tax bill/median sale over the past 12 months) in Glen Ellyn is 1.9%.

Wheaton is 2.1%.
Hinsdale is 1.4%.
La Grange is 1.9%.

[RJA29]

Originally Posted by holl1ngsworth

The median tax rate (median tax bill/median sale over the past 12 months) in Glen Ellyn is 1.9%.

Wheaton is 2.1%.
Hinsdale is 1.4%.
La Grange is 1.9%.

How does the median tax rate differ from the actual paid rate? I thought GE was 2.87%...

[Lookout Kid]

I pay about 2.2% (tax bill over actual market value).

[WannaBeinBoston]

Thanks All, good information. I thought perhaps the homes around Lake Ellyn were assessed higher because of the desirability and location. The DuPage site is definitely helpful to see what the cash values are. That's the divergence.

[destination-unknown]

Originally Posted by holl1ngsworth

The median tax rate (median tax bill/median sale over the past 12 months) in Glen Ellyn is 1.9%.

Wheaton is 2.1%.
Hinsdale is 1.4%.
La Grange is 1.9%.

And while a differential of 0.5% may not sound like much, it would result in an additional $4,000/yr of property taxes for a home valued at $800,000. That's roughly $70,000 in buying power (assuming 4% rate at 30 years).

[holl1ngsworth]

Originally Posted by destination-unknown

And while a differential of 0.5% may not sound like much, it would result in an additional $4,000/yr of property taxes for a home valued at $800,000. That's roughly $70,000 in buying power (assuming 4% rate at 30 years).

Yes. Obviously there's significant variability within each community, and the figures fluctuate quite a bit. Last time I ran the numbers La Grange was over 2.5% and Glen Ellyn was over 2%.

Most nice suburbs seem to hover around 2%. Hinsdale tends closer to 1.5% and towns like Oak Park (2.6%) and River Forest (2.2%) tend towards 2.5% or higher.

[Lookout Kid]

Originally Posted by destination-unknown

And while a differential of 0.5% may not sound like much, it would result in an additional $4,000/yr of property taxes for a home valued at $800,000. That's roughly $70,000 in buying power (assuming 4% rate at 30 years).

You get federal and state tax deductions on it, so that $4,000/yr gets whittled down to about $2,800 per year, depending on what tax bracket you fall in to. You also get deductions on mortgage interest, but that slowly fades away as you pay more principal and less interest on the loan. And then again, you are "paying yourself" a bit more with a home loan, so you do get to keep some of your loan payment. It's not necessarily an apples-to-apples cost comparison.

And of course the taxes paid last year may not be the taxes paid ten years from now. Some suburbs will need to ramp up taxes more than others to deal with things like underfunded pensions. It's hard to figure out what these costs will be in the future.