Question: 
Why does my tax bill rise each year? 

Answer:
Tax bills can rise over time even when you diligently contest your assessment.  But, if you don’t contest your assessment, the tax increases will be even greater. 

Here’s why.
                                                                                                                         
Property taxes are directly impacted by local government spending.  If you review your tax bill, you will see all the governmental agencies that levy a tax on your property.     
                                  
The more these agencies spend, the greater the tax they take from property owners like you.   
  
The amount government  takes from you is reflected on your tax bill in the tax rate.  The higher the spending, the higher the tax rate and the more you will owe.          
                                                
Many governmental agencies are limited by law as to how much they can take from property owners each year.  These limitations are known as tax caps.  Tax caps limit tax levies from increasing from year to year by more than the rate of inflation ---which has been about 2% to 3% per year recently.  
             
But, other agencies are not limited by tax caps and they can take whatever amount they wish.    
In the final analysis, you can expect tax levies to increase at least 2% to 3% each year because of increases in government spending.    
                                                                                                     
So, even if you keep your property assessment under control, increases in spending could cause your  tax bill to grow over time.                                                                                                                          
But, if you don’t contest your assessment, the situation will be even worse as a higher tax rate will be applied to a higher assessment causing an even higher tax bill.

Question: 
How is my tax bill calculated? ​

Answer:
Your tax bill is based on your current assessment, current equalizer, current tax rates and any exemptions you are entitled to as a homeowner.
 
Here’s how the bill is computed:            

1. Your tax bill reflects the current assessment of your property.  If an appeal was filed– and if you won that appeal – the reduced assessment will appear on your tax bill. 
2. The assessment is multiplied by the County equalization factor to arrive at the equalized assessed value of your property, or the EAV.  This is also known as the taxable property value.            
3. The EAV is multiplied by the local tax rate to determine the gross tax due.       
4. If you are a homeowner, you may be entitled to receive exemptions. 

     5.  Exemptions are then deducted from the gross tax to arrive at the net tax due.

Question:
Should our association waive legal fees for senior freeze recipients?

Answer: 
This is a business decision for your board.  We will tell you what the law says and give you some of the pros and cons of waiving legal fees for senior freeze recipients.         
 
The Condominium Property Act gives associations the right to file tax appeals for all unit owners and to charge them for the costs incurred as a common expense.  The Condominium Act provides:

​Some associations choose to bill their unit owners for their share of tax appeal costs.
 
Senior freeze recipients may object to paying tax appeal costs because their taxable property values were already frozen under the senior freeze program.  Why bill senior freeze recipients?         

​These are some of the reasons why the Association might choose to waive legal fees for senior freeze recipients.  We hope this helps your board to make an informed decision.

Question:
I have the senior freeze and I don’t think the Association’s tax appeal benefitted me.  Please explain if it did.

Answer: 
An Association tax appeal can benefit senior freeze recipients.  Here’s how the freeze works and how it may benefit you.      
 
Real estate taxes are based on property values.  The higher the value of your home, the higher your tax.         
 
If you are a Senior Freeze recipient, as your home value rises, the Senior Freeze locks its taxable value saving you money.
 
Even though you are a senior freeze recipient, your taxes are based on your current assessed value. 
 
But, you will receive a deduction on your tax bill for the Senior Freeze Exemption.

This exemption reduces your final taxes so they are based on your frozen value and not your current assessed value.   
 
In many cases, you will not directly benefit from an association tax appeal while you receive the freeze.         
 
But, there are a few instances where you might …         
 

• If the association appeal reduces your assessment below your previously frozen base, you will save money because of the association appeal for years to come.    
• An association appeal will reduce your assessed value and your taxes before exemptions.  This will benefit you when you sell your home because buyers are interested in knowing what the taxes will be when they purchase the home and the freeze no longer applies.            
• While you may receive the freeze this year, you may not be eligible in future years.  And, the association’s appeal will save you money when you no longer obtain the freeze.      

 
Property values for all homeowners – seniors included – are positively impacted from keeping taxes in your development low.

Question: 
If my association files a tax appeal on behalf of all unit owners in our development, am I at risk of losing my Senior Freeze exemption?

Answer:
No.  The filing of a tax appeal will never cause you to lose the senior freeze.  But, it could look that way.
 
Here’s why.

The Senior Citizen Assessment Freeze (the Freeze) provides an exemption (a deduction off the tax bill) for qualifying seniors that is about equal to the increased tax on the home from a base year to the current year using current tax rates.  The base year is the year before the senior first qualified for the Freeze.  So, this effectively freezes the taxable value (EAV) of the home at the level of the base year.  In a rising market, that is a good for taxpayers as their taxes are based on a low value from the past rather than the higher value of the present.

If your Association filed an appeal and the assessment of your property was reduced, but your EAV remained higher than in the base year, you will receive a senior Freeze exemption this year and the tax this year will be the same as it would have been had no appeal been filed.
 
But, if your Association filed an appeal and the assessment of your property was reduced below the base year EAV, your senior Freeze exemption this year will be $0.  This makes it appear as if you lost the Freeze, but that is not the case.  If you applied for the Freeze this year on a timely basis, you remain eligible for it even though the exemption amount is $0. 

If your assessment (EAV) is reduced below your previously frozen Base, your will receive a new Base that will be adjusted below the old/higher one.  Your will continue to enjoy this reduced base for so long as you continue to qualify for the Freeze.  In this case, you will benefit from the Association’s appeal for years to come.

Please see the next page for a numerical example of how the Freeze works:

In summary:

• An assessment appeal will never cause the senior’s tax bill to increase.
• An assessment appeal will never cause the senior to lose the Freeze.
• A senior will lose the Freeze if the senior’s household income rises above $55,000 per year, or the senior fails to apply for the freeze each year on a timely basis.
• An assessment reduction from an Association appeal may cause the Freeze exemption (the deduction off the tax bill) to shrink, but it will never cause the tax bill to increase.
• If an assessment (EAV) is reduced below the Base, the Freeze Exemption will be $0 that year, the senior will save money that year, the Base will be reduced permanently, and the senior will realize a tax savings for so long as they remain in the Freeze program.

 
1Assumes the senior first obtained the Freeze in 2010; that the assessment in 2009 was $20,000; that the original Base was 67,402 (2009 assessment of 20,000 x 2009 State Equalization Factor of 3.3701); and, that the new Base has been reduced to 53,471 (2001 assessment of 18,000 x 2011 equalizer of 2,9706).  In this case, the Senior Assessment Freeze Exemption is $0 because the Base has been lowered from 53,471 to 67,402.
 
2Tax Savings from Association Appeal is the difference between your Current Year Tax Bill After Exemptions & Savings With the Assessment Reduction (2,371.43) Current Year Tax Bill After Exemptions & Savings Without the Assessment Reduction (3,131.28). The client received an additional savings of 759.94from the appeal. 
​

Question:
What is the difference between the senior exemption and the senior freeze?

Answer:
The senior exemption and the senior freeze are deductions off of a senior citizen’s real estate tax bill.  Here’s how these exemptions work and some of the differences between them.    
 
Real estate taxes are based on the current assessed value of the home.  As the value of the home rises, the taxes also rise. 
 
Qualifying seniors receive deductions off their tax bills because they are senior citizens.  The senior citizen exemption reduces the tax bill by a sum certain each year.  The actual deduction is $5,000 times the local tax rate.  So, if the local tax rate is 6%, the senior citizen exemption will be $300.
 
The goal of senior freeze is to lock the taxable value of the senior’s home.    

​As the senior’s home value rises, its taxes will also rise.  But, senior freeze recipients receive a deduction off their tax bills for the freeze.  The senior freeze deduction is an amount large enough so the final tax bill (after the senior freeze exemption) is based on the frozen value and not the current --- and higher --- assessed value.   As a result of the senior freeze, qualifying seniors enjoy a much lower tax bill. 

Question:
Can unit owners opt-out of condominium association appeals? 

​Answer:
No, unit owners cannot opt-out of association appeals.  But, they can appeal on their own.  And, by doing so, they will effectively have opt-out of an association appeal.
 
The Condominium Property Act allows associations to contest tax assessments “on behalf of all unit owners”.  We call these appeals collective appeals.  The Condominium Property Act provides as follows:

​The Act is mandatory.  It doesn’t allow Associations to pick and choose which unit owners to include in an appeal.  The Act requires associations to include all unit owners.  So, Associations cannot allow owners to “opt-out”.  But, every unit owner has the right to appeal its assessment by filing its own appeal.
 
If the Association files a collective appeal and an owner files its own appeal, most assessing officials will recognize the appeal filed by the unit owner and will remove that unit from the collective appeal.
 
Other assessors may, however, require the consent of the association’s attorney to remove a unit from a collective appeal.
 
Elliott & Associates will consent to the removal of a unit owner from a collective appeal.
 
Therefore, while associations cannot allow a unit owner to opt-out of a collective appeal, any unit can effectively do that by filing an appeal on his or her own.
 

Question:
Should our association pay tax appeal legal fees from our budget or bill the unit owners back?

Answer:
This is a business decision for your board.  We will tell you what the law says and give you some of the pros and cons of billing back or not.        
 
The Act provides that tax appeal costs are common expenses.  This means the Association is entitled to pay these costs from their budget as they would any other association expense.   
 
The Condominium Act provides as follow:

​Many associations, however, choose to bill their unit owners for their share of tax appeal costs.

​These are some of the reasons why Association might choose to bill back or not.  We hope this helps you to make an informed decision.

Question: 
How do condominium association appeals work?

​Answer: 
The Condominium Property Act allows condo boards to appeal tax assessments “on behalf of all unit owners”.               
 
This requires a two-thirds vote of the board or a majority of the unit owners.  Most associations obtain authority from their boards.
 
The Act provides as follows:

​Tax appeals can only be filed by a licensed attorney and not by the association, its officers or property managers.  The act of filing a tax appeal by a non-lawyer on behalf of a condominium association and/or its unit owners is considered the practice of law.
               
The attorney will file one appeal on behalf of all unit owners in the development.  These appeals are called collective appeals.         
 
The assessing officials prefer collective appeals for a few reasons:       

• Collective appeals are less work for the assessing officials.      
• The assessing officials generally prefer to negotiate with one knowledgeable attorney rather than numerous property owners or their attorneys.
• Collective appeals result in uniform assessment results.            

 
Legal fees and costs incurred in connection with collective appeals may be charged to the unit owners as “common expenses”.    
 
Some associations choose to pay appeal costs from the association’s budget.  
 
Others choose to bill the unit owner for their pro-rata share of these costs.      

Question:
Why did I get a one-year assessment reduction?

​Answer: 
Assessment reductions are generally awarded for multiple years.  But, occasionally they may be awarded for one-year only.  And, that is not necessarily a bad thing.  Here’s how one-year reductions work and why they may actually be a good thing.
 
Property in Cook County is assessed triennially, meaning once every 3rd year.  Once an assessment is reduced, that reduction will typically remain in place for all 3-years of the assessment cycle.   
 
Outside of Cook County, property is assessed quadrenially, or every 4th year and any reduction should benefit the taxpayer for the remainder of the assessment cycle, and maybe longer.  That’s because the Assessor adjusts assessments each year by a percentage called a factor.  Factors reflect changes in real estate values in the local community.  So, when an assessment reduction is awarded one year, it carries forward to all future years of the same assessment cycle because the factor is applied to the reduced assessment rather than the originally proposed/higher one. 
 
In Cook County, the Assessor and Board of Review sometimes mark their reductions as one year only.  In those cases, the assessment the following year will be increased to the original level (before the reduction) and the taxpayer will need to appeal again.       
 
The Cook County assessing officials tend to issue one-year reductions when property has

• high vacancy,
• unusually low rental income,
• unusually high expenses, or
• the building was constructed or demolished during the tax year.          

 
One-year assessment reductions can be substantial and the assessment will often be reduced well below the level of the prior year.            
 
The assessing officials tend to award one-year reductions to help taxpayers who are suffering financially.  But, they require the taxpayer to appeal again the following year to prove the hardship continues to exist.              

Multi-year reductions, on the other hand, tend to be less dramatic.   Usually, an assessment increase is reduced or eliminated and the reduction will carry forward to the rest of the assessment cycle.   
 
One-year assessment reductions often occur in Cook County.  And, are a good thing because the assessment is often reduced much more than it would have been had a multiple year reduction been awarded.