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Old 01-17-2014, 10:44 PM
 
215 posts, read 315,505 times
Reputation: 139

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My ex-husband used to own a three-flat in Lakeview and used to tell me his property taxes were outrageous. He said that the same mortgage would have lower taxes in smaller "non-corrupt" cities, as he put it.

I'm trying to figure out what I'd owe in taxes if I buy a place, but the property tax calculators I found aren't specific to any county, and the articles I found online from the 2012 reassessment are making my head spin. And then if you make improvements after the sale, they charge you more in taxes? What gives? Sorry if I sound like a moron. I've never bought a home.

My budget is $175K if that helps. I know, you'll all laugh and tell me to enjoy the sounds of gunfire as I drift off to sleep.
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Old 01-18-2014, 05:19 AM
 
28,461 posts, read 79,893,117 times
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The "calculation" is mostly impossible -- as you correctly point out the assessor can adjust the value of your property anytime you make improvements. Further the assessor can, and often does, adjust things upwards as the value of properties rise as shown by sales data. The quadrennial re-assessment is another opportunity for things to go up...

The best advice is to budget about 2% of the selling price for property taxes. Odds of any bill coming in much higher than that in any but the most out-of-whack area are very low. In some areas you might get lucky and see property tax only about 1.5%...

The real estate listings for existing units are required to state most recent property tax paid -- if the seller had senior's freeze or similar things you could see your bill jump. If you are buying in a multi-unit or area with many similar homes they may not be all assessed the same, the assessor often allows the long term owner's assessment to lag behind places that sell more frequently, not fair but something to keep in mind and potentially you can appeal to get your assessment lowered...
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Old 01-18-2014, 10:15 AM
 
215 posts, read 315,505 times
Reputation: 139
Thanks, 2% is an easy way to estimate it. I know that the assessor gets information from contractors when they make improvements such as adding rooms and bathrooms, but if you just make general cosmetic improvements, does that affect your property taxes?
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Old 01-18-2014, 01:13 PM
 
Location: Chicago - Logan Square
3,396 posts, read 6,774,074 times
Reputation: 3725
I wouldn't bother trying to estimate taxes, just look at what the current owners are paying on a specific building. It shouldn't increase much at the next assessment, and if it does you should be able to successfully contest it.

Cosmetic improvements don't impact your tax assessment. Increasing property values, changes to square footage, or number of bedrooms/bathrooms can. We tore down an enclosed porch and built an addition in it's place. Since the porch was included as square footage in previous assessments it had almost no impact on our next assessment (it did add a little bit though, since the addition is 250 square feet larger than the porch was).
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Old 01-19-2014, 08:55 AM
 
Location: broke leftist craphole Illizuela
10,339 posts, read 16,052,004 times
Reputation: 20191
It is futile to try to predict. The local government decides they want more money and that the people are a bottomless piggy bank and they adjust the market valuation, rate, and equalization factors to satisfy their desires rather than show any fiscal discipline.
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Old 01-19-2014, 09:01 AM
 
4,025 posts, read 4,166,906 times
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How to calculate property tax before you buy My ex-husband used to own a three-flat in Lakeview and used to tell me his property taxes were outrageous. He said that the same mortgage would have lower taxes in smaller "non-corrupt" cities, as he put it.

The mortgage has nothing to do with the amount of tax !
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Old 01-19-2014, 10:17 AM
 
215 posts, read 315,505 times
Reputation: 139
Well, he is a liar in general which is one reason he is an ex, so I did have an idea this would be untrue when I posted it. Maybe he meant that the politicians increase taxes more often than other cities.
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Old 01-19-2014, 10:59 PM
 
936 posts, read 2,079,977 times
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Once you have a particular area in mind then you can find out what the tax rate is for that particular location. Depending on the local, either the assessor or treasurer's office can provide you with the tax rate.

Outside of Cook county, most properties are assessed at 1/3 of their market value. Most assessors will initially start out with new construction property by simply taking the sales price and dividing by 3. You then can deduct various exemptions from the assessed value prior to multiplying it by the tax rate. Check out the assessor's website for a list of those exemptions.

For an existing house, you already will know the rate and can compare its existing assessed value against 1/3 of the projected sales price. The assessor might adjust the AV after the sale, but do it in accordance with what similar houses are assessed at. So it's not always 1/3 of your recent sales price. The concept of making your AV fair as compared to comparable properties is not as 'equitability'.

With proper research, you should be able to estimate the taxes pretty closely. You can also do research on how much the tax rate has increased in recent years in order to project into the future along with projecting an increase or decrease in housing values.

Just remember, when you pay your mortgage you are only dividing your total tax bill by 12. So if your taxes go up by $500 then your mortgage payment will increase by $83 per month. On the other hand, if you borrow at additional $500 then your mortgage payment will go up by roughly $2.50 per month. So property taxes are definitely something to be concerned with.

I'm guessing that your ex was talking about the property tax escrow part of your payment which indeed connects your mortgage with the influence of higher taxes.
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Old 01-20-2014, 12:09 AM
 
11,289 posts, read 24,588,415 times
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I'm at Irving Park and Sheridan for the last 6 years and have been around 1.5% the whole time give or take. It was 1% last year and in 2008. Got up to almost 2% in 2011.
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Old 01-20-2014, 11:26 AM
 
4,094 posts, read 7,117,783 times
Reputation: 2557
There is no need to calculate. Why not just go to a real estate website such as redfin and start surfing around for the type of home and place you want to buy it in and see what the property taxes are. So if you want to buy a single family house in for example Berwyn, look up a house for around the same amount you want to pay and see what they estimated taxes are. You will at least get a ball park. It matters where you live so you have to be somewhat specific as to place. Cook county taxes are cheaper than Dupage.
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