How are property taxes calculated in illinois
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Introduction
Property taxes are an essential revenue source for local governments in Illinois, funding various public services such as schools, police and fire departments, and infrastructure. The method by which these taxes are calculated can often be confusing for homeowners. This article will break down the process of calculating property taxes in Illinois.
Understanding Equalized Assessed Value (EAV)
The first step in calculating your property taxes is determining the property’s Equalized Assessed Value (EAV). In Illinois, residential properties are assessed at 33.33% of their market value. This means that a property with a market value of $300,000 would have an assessed value of $100,000 ($300,000 x 0.3333).
Next, counties apply an equalization factor to account for differences between the local assessments and state equalization standards. The State of Illinois aims to have consistent property values across different counties. This factor is determined annually by the Illinois Department of Revenue and can range from less than 1 to more than 3.
To calculate the EAV, multiply the assessed value by the equalization factor. For example, if a property has an assessed value of $100,000 and an equalization factor of 1.5, the EAV would be $150,000 ($100,000 x 1.5).
Calculating the Tax Bill
Once you have determined the EAV of your property, you can begin to calculate your tax bill. The tax bill is determined by multiplying the EAV by the local property tax rate. Local government entities such as schools, municipalities, and special districts set their rates based on their annual budgets.
In most cases, tax rates are expressed in terms of dollars per $100 of EAV. For example, if a homeowner’s EAV is $150,000 and their local tax rate is $6 per $100 of EAV, the tax bill would equal to $9,000 ($150,000 / 100 x $6).
Deducting Exemptions
Homeowners may be eligible for certain exemptions that could reduce their tax liability. Some common exemptions in Illinois include:
1. General Homestead Exemption: This exemption can reduce the EAV on a homeowner’s
primary residence by up to $10,000.
2. Senior Citizen Homestead Exemption: Homeowners aged 65 years or older could qualify for an additional reduction of up to $8,000 from their EAV.
3. Disabled Person’s Homestead Exemption: This exemption can reduce the EAV on a homeowner’s primary residence by an additional $2,000 if they meet eligibility requirements.
Each exemption is subtracted from the EAV before the tax bill is calculated. Continuing with the previous example, if a homeowner was eligible for the General Homestead Exemption ($10,000) and the Senior Citizen Homestead Exemption ($8,000), their adjusted EAV would be $132,000 ($150,000 – $10,000 – $8,000). Their new tax bill would be $7,920 ($132,000 / 100 x $6).
Conclusion
Understanding how property taxes are calculated in Illinois is crucial for homeowners wanting to estimate their annual tax liability accurately. By identifying your property’s Equalized Assessed Value and local tax rate while accounting for any exemptions you may qualify for, you can take control of your property tax situation and better prepare for this essential expense.