Realistic expectation for property taxes next 5+ years (no politics please) (Union: house, to buy)

[Grlzrl]

Originally Posted by Curly Q. Bobalink

One can only hope Berrios will be able to address what I see as one of the larger problems in the property tax system, and that is the unequal application of the tax. IMHO, real estate taxes should be based on the best estimate of the "true market value" of a property, which is not the case currently. Heck, in some of the poorer south suburbs, I've "read" that the annual tax equals up to eight percent of the value of the property, while in some downtown areas, the wealthy are able to limit the amount they pay by hiring appeal lawyers (like Madigan's own firm) to get reductions. I would love to see a real, hard-core analysis of this problem, but have no idea who could actually do it. As stated earlier, real estate taxes are local, but isn't the state average supposed to be something like two percent? If so, then how in the heck does one explain the much higher percentages paid all across the region? It sure would be nice if Pritzker got something passed that capped the tax at some percentage of market value, to protect the middle and lower class (it may go a long way to stabilize prices), but I've heard no mention of that. That's one reason I've been critical of his proposed graduated tax, that it doesn't go nearly far enough in shifting the overall tax burden based on ability to pay, it still leaves the state's tax methodology largely regressive.

As to the OP's original question, I don't think it's possible for his taxes to double in such a short period. And, if he purchases in the "right" neighborhood, rising real estate prices may completely offset the higher taxes. But if one were to buy in the "wrong" neighborhood? You could get hit by falling prices and rising taxes - Caveat emptor.

Haha. Rising real estate prices? Not where I live.

[Grlzrl]

Originally Posted by OKParker

To everyone talking about the pension crisis - has anyone seen the calculations done by Crain's calculated the impact that taxes on retirement income (IL is one of 3 states that does not tax retirement income..) would have? If we taxed retirement income on those who made over 100k we would end the pension crisis.

It is ridiculous that this isn't being floated right now - but Crain's said that it is politically impossible b/c the old vote much more than the young. It is an obvious solution that is infeasible due to this basic fact of voting differences by age.

You are asking the corrupt Illinois management to tax the people they paid to vote for them? It ain't gonna happen.

[Grlzrl]

Originally Posted by ChiGuy2.5

Of course there are plenty who cannot easily pick up and move. I was saying the richest have the resources to move out (bringing their highly taxed income with them). Not sure why you're refuting my point when my point rests solely on the purpose of pointing out that those with money, which are taxed the greatest, have the resources to move out.

I'm stating this will lead to a slippery slope if they implement something like this. It will be the Illinois form of trickle down economics. Tax the rich until there are none, then work towards taxing the poor. All to feed a big fat pig known as the government.

I suspect you are talking to a state employee.

[Grlzrl]

Originally Posted by svicious22

I’d guess many people will see a 40-50 percent increase in taxes over the next five years. Property values will likely remain stagnant or go down in most neighborhoods.

It's already happening. I live in an area of higher earners and almost every person I talk to who has kids in high school or above has an 'exit plan'. It's kind of unbelievable.

[Berteau]

Originally Posted by Di3s3l_Pow3r

I don't see how 40% - 50% is realistic, it will never happen. a 3%~4% with inflation is a more realistic scenario

They mean a 40-50% increase from current levels, not an actual 50% property tax rate.

[svicious22]

Originally Posted by Di3s3l_Pow3r

I don't see how 40% - 50% is realistic, it will never happen. a 3%~4% with inflation is a more realistic scenario

3-4% over all Five years?! (So as to be comparable to my 40-50% figure). No way, no how.. Even if you mean annually that’s super optimistic, as in 16-22% over five years. I’d be thrilled with that, which is sad.

[Berteau]

Originally Posted by svicious22

3-4% over all Five years?! (So as to be comparable to my 40-50% figure). No way, no how.. Even if you mean annually that’s super optimistic, as in 16-22% over five years. I’d be thrilled with that, which is sad.

Yes. Having a property tax rate of 55% which would be $160,000 a year for a $300,000 home is pure stupidity to believe or take seriously. If property taxes are currently at 3% and they increase 50%, they are now at 4.5%. Some people do not understand percentages well.

[OKParker]

Originally Posted by svicious22

3-4% over all Five years?! (So as to be comparable to my 40-50% figure). No way, no how.. Even if you mean annually that’s super optimistic, as in 16-22% over five years. I’d be thrilled with that, which is sad.

IMO the range for a property tax is incredibly dependent on other taxes passed. As I mentioned, taxing retirement benefits alone could stop any property tax increases. In a similar vein, the graduated income tax could stop property tax changes to 1% a year..

It is unlikely that property taxes are the sole way that future debt is paid for.

[Curly Q. Bobalink]

Originally Posted by Grlzrl

Haha. Rising real estate prices? Not where I live.

Me either - believe me, I'm well aware of how much so many of us have "lost" via unappreciated property in the past decade in Illinois. But a lot of people, at least from what I've read on these forums, have done quite well, especially in the "hot" areas of Chicago (near downtown, if I remember correctly).

From what I understand, part of the problem is that the suburbs have been getting hit harder than the city with respect to property tax increases, which have prevented appreciation there (potential buyers only have so much monthly payment to work with, and the more they have to pay in taxes, the less they can or will pay for the property itself). Will Berrios even out the playing field between the city and suburbs in Cook County, or will the trend be allowed to continue? Again, I'd like to see a current study done showing current ratios of taxes : actual property values across the region, to provide a baseline. And, you're correct, I'm also amazed at the number of people I speak with who "say" they plan to leave as soon as possible.

[Bitey]

^^ There's only so much Berrios can do to "even out" the playing field between various parts of Cook County because a big chunk of the property tax component is determined by the local municipal taxing bodies. Traditionally, residential property taxes as a percentage of home value have been lower in the city because there's a huge commercial/industrial tax base to take up a lot of the slack. (At this rate however it may not be long before the city/suburb property tax gap closes.) The distressed hamlets in particular down in the south suburbs have very high tax rates as a percentage of property values because those values are so low they have to jack up the millage rate to try to get any revenue at all from the property owners. There's not much Berrios can do about that.