Yesterday, the Cook County annual form required to preserve your senior exemption for real estate taxes was mailed by the assessor. This is an eagerly awaited, annual ritual that keeps many in the assessors office busy and makes many seniors worry that they will miss the form.
Here it is, if perhaps you missed it.
Forms showed up today on the Cook County Assessor’s website for the following exemptions for the 2014 tax year
1. Homeowner’s exemption: This is only needed if you bought a new house in late 2013 or 2014. You (or the former owner had to live there on 1/1/14 to qualify for this. File it once and you are done. Saves about $300 to $700 on the tax bill.
2. Senior exemption: Requires an annual application for those 65 year of age and older and saves about $400 on the tax bill
3. Senior freeze: Requires an annual application and an income of less than $55,000 and freezes the owner’s assessment level.
Be sure to file your senior and senior freeze applications now.
I’ve heard that the Cook County second installment real estate tax bill could be mailed as soon as this Friday June 28, 2013. This is depressing news and kind of a buzz-kill right before the 4th festivities. I spoke to someone in the local assessor’s office who told me that the tax rate in Palatine is increasing a full one percent over last year so that should produce some jolly good, jumbo tax bills.
This is the second installment bill so it features any increase or decrease (best of luck on the latter) for the year. For the past few years, the bill was mailed very late by the county. This year they are Johnny-on-the-spot and it will be mailed early and will be due August 1, 2013.
Please be sure to check that your homeowner’s or senior exemptions are on the bill. If not, you can get the bill reduced by filing a certificate of error and that allows you to pay the lower amount.
A real estate closing takes about 1.5 hours, if it’s perfect. This being real life and all, many of them take much longer.
As we sit waiting for word from the lender that all is well and that we can disburse, we talk about the Bears, about how the White Sox caved, then we cover details of when the client is moving, how much he paid for his POD, and after about two hours, we all go blank, stare at each other and check our phones incessantly. Mercifully, we rarely touch the third rail: politics.
When all small talk is exhausted, invariably, someone says “well, next year you won’t be able to sell any real estate because Obama put that 3.8% tax on all real estate.”
After hearing this for about the 800th time yesterday, I did some detective work. I went to Snopes.com, which is an awesome site that tells us whether a “fact” is an urban myth or not.
Here’s the truth on the 3.8% real estate tax from Snopes.com:
Does the 3.8% tax apply to all real estate sales?
No, it will apply to very few people, probably less than 2% of the population. Also, this only applies if you have a big gain on the sale of your real estate and that knocks about almost everyone since we have had no gains on real estate since the late 1990s. Those who bought their homes in the 60s, 70s or 80s and who also have huge incomes might have to pay the tax. The masses will pay no 3.8% tax.
What income levels does it apply to?
First, your income has to be above $200,000.00 if you are single or if you are married, above $250,000. If you make less than those amounts and sell real estate, you pay nothing. The tax is not on the sale of real estate, but in the investment income produced by the sale of real estate.
I sold my home for a large gain and have a salary of $200,000, so what would I owe?
Let’s say a single guy sells his house for $600,000 and he paid $300,000 for the house, so his gain on the house is $300,000. He can exclude $250,000 of profits on real estate under the law already, so that is subtracted and he has a gain of $50,000. Stick with me here, this is convoluted stuff.
The 3.8 tax would apply to the LESSER of:
Clear as mud, eh? Suffice it to say, this will apply to very few folks.
There’s a new Cook County “property tax portal” that combines information from the assessor, recorder and treasurer. It’s easy to search by PIN or property address. Assessments, tax rates, tax bill amounts, property ownership and mortgage information are provided on the site.
I use the assessor, treasurer and recorder’s website every day so for me it’s a welcome combination of scattered information.
Downloading a copy of a recorded deed in Cook County continues to be one of the bigger pains known to mankind. Unfortunately, that was not improved in this update.
For years and years, the Cook County senior exemption for real estate taxes, which reduces the tax bill of those over 65 years old by about $250, did not require an annual application.
Now it does.
Surprise, it’s all messed up because no one realizes that they have to file the application.
It appears that one in five seniors did not file the new application for the senior exemption. So when tax bills are mailed next week, seniors across Chicagoland will hit the roof when they see they did not get their senior exemption. Or they will just pay the higher tax bill, thinking they already got the exemption.
This can be cured after the tax bill is received by filing for a certificate of error before the tax bill is paid. Tell your senior friends to check their tax bills, because there’s a good chance the exemption will not be there.
Cook Co. is riddled with real estate tax exemptions and the long term occupant exemption is a strange, stealth exemption that I have never liked much.
It’s not mentioned much on the Cook County Assessor’s website and no one understands it.
The exemption is a substitute for the homeowner’s exemption, but the benefit of it is that there is no cap, so the savings can be more than the typical homeowner’s exemption.
To qualify you need:
1. Owned your home from 1/1/00 to 1/1/10 (10 years).
2. Household income of less than $100k.
3. A big assessment increase (that’s basically everyone).
The assessor just mailed packets to those of you deemed worthy. There is no form on the site to apply for the long term occupant exemption, so you have to rely on the mailed form (which is vintage 1960). The application has to be filed by June 22.
The exemptions for Cook Co. real estate taxes are like some sort of Byzantine maze.
There are seven different exemptions and here is a breakdown of them.
The collar counties (Kane, DuPage, Lake, McHenry) make tax exemptions simple. Getting and keeping exemptions is easy there. In Cook County, the exemption applications and renewals have become an unnecessary, bureaucratic tangle.
Now, Cook requires an annual application for the senior exemption. The new 2010 form is here. Be sure to apply for this one right away. Previously, this was automatic from year to year, but that was too simple so the assessor mailed out 300,000 applications. What are the chances that half of those will be signed and returned?
The 2010 senior freeze exemption, that freezes the assessment of seniors earning under $55,000.00 per year, is now online too. This one has always required an annual application because it includes last year’s income tax figures.
Don’t let the Cook Co. tax maze stop you from getting the exemptions you deserve.
The first installment of 2010 taxes will be mailed any day in Cook Co.
The tax bill is normally due 30 days after mailing.
However, this year the tax bill will be due April 1, 2011, which is an extra 30 days.
I live in Palatine. Yesterday, in the mail (and about as welcome as a jury summons to 26th and Cal, an IRS love note or a bounced check) came the reassessment notice for my real estate taxes.
My tax assessment went up 5%, which I don’t consider too bad.
This is the triennial reassessment, meaning that I will be stuck with this assessment for 2010, 2011 and 2012.
Rather than being afraid of this paper bullet, I look at is as an opportunity to reduce my real estate taxes and so should you.
I will file a protest of the assessment. I have no idea how to do this and I always hire someone to do it for me. I wrote here about how to file a tax protest and who to hire.
This is a good opportunity to keep your real estate tax down if you live in Palatine Township, but remember you only have 30 days to file a protest. So don’t fear your reassessment notice and take some action. Trust me, no one wants to listen to you complain about real estate taxes for the next three years.