What has caused this property tax delay?
It is projected that the second installment of property tax bills in Cook County will be delayed by at least four months. It has been estimated that the projected time for tax bills to be available is the end of November (after the election.)
The delay is caused primarily by a modernization project by the County known as the Integrated Property Tax System. In 2015, the County signed a contract with Tyler Technologies to complete various data upgrades for the County. There were known issues with meeting deadlines beginning as early as 2018.
There are more than 1.8 million parcels of land in Cook County with Cook being the second largest County in the country. Therefore, transitioning to a new, modernized system requires coordination among several offices, causing delays in the issuance of property tax statements.
What is the county doing about the delay?
The County has focused on the impact to local taxing bodies. In July of this year, the County Board approved a loan program for taxing bodies to cover expenses while jurisdictions wait for payments.
The County has also hired a Director of Property Assessments and Tax Policy. This person’s role is to shepherd the integrated property tax system project to completion.
The County also discussed the importance of getting tax bills out by the end of this year so that property owners can claim the various deductions on state and federal taxes for 2022. If property owners do not pay the second installment by the end of 2022, there is a risk that full deductions cannot be taken advantage of.
How has this impacted real estate transactions?
Buyers are having to escrow more before a closing and the money is in escrow for a longer period. There may be some confusion between buyers and sellers however, in many cases, REALTORS® are able to navigate a prorated tax amount based off of previous tax years.
The other big concern is that the second installment reflects changes in assessments. Any changes that were made to valuations by the County will certainly have an impact on the total tax due. Many property owners will not know the direct impact of a reassessment until receiving that second installment bill.
What is the impact on property owners?
On the residential side, the biggest impact will be felt for owners that do not escrow property taxes. They will be hit with two bills that are due by the end of the year and then early in 2023 so it requires them to budget. In the case of a reassessment, if the second installment is significantly higher, property owners may have sticker shock and run the risk of not having the cash to cover a higher than expected tax statement.
Similarly, Commercial owners will need to anticipate changes to their cash flow. Since commercial pays two and half times residential in Cook County, the amount taxed will impact balance sheets. Again, smaller businesses with less cash will be impacted.
What can we expect?
Your Government Affairs (GADs) staff is monitoring this issue on a weekly if not daily basis. If there are any changes to the projected timeline, communication will occur as soon as possible.
Once the Treasurer’s Office receives the file from the Clerk, property tax bills are available online a few days after they are received. Rather than having to wait for the mailed copy of the bill, REALTORS® can access property tax data online once the Treasurer sends notice.
The other expectation is that over the long term, this modernization project will eventually be complete, ensuring that our property tax system is a unified system where the offices are better coordinated.