Understanding the Assessment Process

1
Understanding the Assessment Process

• The objective of this session is to explain the
  assessment, equalization and appeal processes.
  Discuss information available to taxpayers on the
  web and answer related questions.
• Presenters
• Marty Paulson Chief County Assessment Officer
• Jeff Lee- Lake Villa Township Assessor

2
The Misconception

• Assessors do not have a goal of increasing tax
  bills!
• They only mass appraise real estate, based upon
  a methodology set forth in state statute.

3
What is the reason for property tax assessments?

• The ad valorem property tax assessment is used to
  distribute the burden of the property tax over a
  populous, based upon the value of real estate
  over given period of time.

4
Who makes the market?

• Buyers and sellers are the ones who determine the
  value of real estate.

5
What sales will be used to determine 2008
assessments?

• The sales that occurred in 2005, 2006 and 2007
  it is a retrospective value estimate.
• This should show a moderating in assessments,
  they will rise some, yet not much in comparison
  to recent years.

6
Assessed Values

• The assessment value is not intended to be a
  reflection of current market values.

7
Assessed Values

• Are at approximately one-third of the market
  value of the property.
• Based upon sales from the three years prior to
  January 1, 2008.
• So for a property that has a market value of
  200,000the assessment should be near 66,660.
• In analysis we look at the ratio of sales to the
  assessed valuescall them a sales ratioand use
  them in analyzing assessment quality or how
  close the assessments are to the market.

8
Assessments in Lake County

• In Lake County, we are to value or assess
  properties at 33.33 of full market value.
• For 2007 tax bills, our county-wide three year
  average ratio was 33.17 (after equalization).
• The average ratio for the 2007 sales compared
  with the 2006 valuations was 30.07 countywide,
  meaning values continued to rise in that year
  (6473 sales).

9
Role of the Township Assessor

• Determine the market value of all properties
  within their jurisdiction.
• Utilizes the many sales that occur in a township
  as a basis for assessed values.
• Works to distribute the burden of the real estate
  tax in an equitable manner based upon property
  value.
• Perform administrative functions related to
  homestead exemption eligibility.
• Capture parcel characteristic information on
  properties in their jurisdiction.

10
Role of the Chief County Assessment Office

• Evaluates the township assessor values.
• Applies local equalization to level the tax
  burden between townships.
• Notify taxpayers of their new assessments.

• In Lake County, the CCAO staff serves a dual role
  as support to the Board of Review.
• Make information available to taxpayers on the
  web.
• Defends Board of Review decisions at the PTAB.

11
Why do we apply equalization factors?

• A part of the statutory role of the CCAO in state
  law.
• Equalize assessment levels from township to
  township.
• Assessors perform a function like this in their
  work.
• If we do not perform this function, the state
  will apply a multiplier to the countys parcels
  in a way that is not fair, one factor for all.
  

12
Equalization

• In using a three-year average of the median
  ratios, valuation spikes upward and downward are
  smoothed out (versus Cook County).
• This does help with the stability of assessments.
• Yet, the third year back seems like long agohere
  at the end of 2008, talking about 2005when it
  was a market peak.

13
Equalization Next Year

• Unadjusted median ratios are very close to 33.33
  for most townships.
• This has not happened in recent memory.
• The result will be higher three-year averages of
  the medians.
• In some instances, we may see assessments
  decrease township-wide.
• Based upon about eight months of sales that would
  qualify for analysis purposes (re-sales of
  existing properties).

14
Reasons for Appeal of an Assessment

• The assessor has placed a market value estimate
  on your parcel that is higher than actual market
  value.
• The assessment is based on inaccurate parcel
  characteristics.
• The assessment is higher than those of similar
  neighboring properties (uniformity).

15
Steps to Assessment Appeals

• 1. Obtain the assessed value of your property as
  well as those of similar ones.
• 2. Determine the fair market value of your
  property (sales of comparables).
• 3. Discuss the assessment with your assessors
  office.
• 4. Determine the basis for your filing
  (uniformity, market value or both).

• 5. Compile and file a written complaint with the
  Board of Review (reviewed later).
• 6. Present your evidence in a hearing at the
  Board of Review (in person, by phone or by
  letter).
• 7. File a subsequent action with the State
  Property Tax Appeal Board or the Circuit Court.

16
Recommended Types of Evidence

• An appraisal
• Real Estate Transfer Declaration or other sale
  evidence
• List of Recent Sales of Similar Properties

• Photographs
• Characteristic Information on Comparable
  Properties
• Copy of Property Record Cards

17
Board of Review Forms

• Residential Complaint Form
• Residential Comparison Grid
• Glossary of Terms describes the grid
• Rules of the Board of Review please take a look
  a these to ensure you are up to date on how the
  Board operates.
• New Comparable Search capacity is now available
  on our website.

18
The Current Real Estate Market What happens if a
sale in 2007 or 2008 is less than the assessment
on a given property?

• In most instances our Board of Review will
  recognize an arms-length sale after January 1 as
  the best evidence of market value for 2008. They
  will also recognize sales in 2007 as good
  evidence of value for 2008.

19
Lake Countys Website

• Property Information
• Comparable Search
• Photos and Assessor Sketches of Properties
• Interactive Mapping Application
• Tax Bills - County Treasurers site
• Our aim is to continue to create more access and
  transparency.

20
Evidence

• Board of Review Rules call for assessors to send
  their evidence to an appellant prior to a
  hearing.
• Appellants who wish to supplement their initial
  evidence submission should also share their new
  information with all parties involved.
• This leads to a more productive hearing.

21
Advantages of a Property Tax

• Local administration
• Locally spent
• Opportunity for taxpayer input participation
• Error correction
• Stable Predictable way to fund local government
  services.

22
Disadvantages of the Property Tax

• Ability to pay not considered
• Difficult to understand formulas, timing,
  multiple participants
• Lump sum tax
• Uniformity vs. Market Value

23
The Property Tax in Illinois

• All of the money paid stays in your community.
• One of the fairest taxes we pay.
• Under constant pressure from decisions made at
  the state and federal levels pushing service
  responsibility to the locals.
• Impacted by population increases and the desires
  of the local community.
• In this challenging timeframe, the property tax
  will be impacted more by the needs of Lake County
  taxpayers (LCHD, Board of Review, township
  assistance).

24
Property Tax Reform and Relief Task Force

• Charged with reviewing the present system and
  recommend changes to the General Assembly.
• Nine members, three legislators are on the panel.
  Sen. Terry Link in chair of the group.
• Suggestions/ideas are encouraged.
• The devil you know versus the devil you dont
  know

25
Taxes, Taxes, Taxes

• The Board of Review does not do taxes. It is a
  good idea to keep your case to the facts about
  property valueit will get you a better audience.

26
Information Sources

• 1. The Township Assessors Office
• 2. The web
• Property Tax Assessment Information
• www.co.lake.il.us/assessor
• Interactive Mapping Applications
• www.co.lake.il.us/maps
• Appeal Deadlines
• www.co.lake.il.us/boardofreview
• 3. Multiple Listing Information
• 4. Personal Knowledge
• 5. The Chief County Assessment Office
• Note The countys web address is changing in
  November to lakecountyil.gov

27
Ways to Contact Us

• Assessor_at_co.lake.il.us
• BoardofReview_at_co.lake.il.us
• CCAO web site
• www.co.lake.il.us/assessor