After purchasing a home in Illinois with the assistance of their real estate lawyer in Mount Prospect, homeowners are required to pay property taxes. In local governments, these taxes are used to finance a large majority of the services that are provided to their citizens. However, the largest share of the property tax goes to the school systems to fund elementary and secondary education. In Illinois, according to the Illinois Department of Revenue, how much property tax homeowners are required to pay depends on the value of their property.
The definition of market value
Although value is a concept that is highly variable, homes in Illinois are assessed based on their value in the open market. Referred to as “market value,” this is the amount of money a home would sell for in a real estate market that is open and competitive.
However, the market value of a property can only be presumed as long as both the buyer and the seller used proper judgement during the selling process and a sufficient amount of time passed before the sale was completed. Additionally, the sale cannot have been affected by non-market pressures like foreclosure or bankruptcy.
How value is assessed
After working with a real estate lawyer in Mount Prospect to purchase a home, there are three different methods that a homeowner’s assessor may use to determine the market value of their property. These include the following:
- Cost – the property’s cost refers to how much funding would be needed for the home to be reproduced or rebuilt. It also accounts for depreciation that may occur after age and normal wear and tear.
- Income – this refers to the current worth of the income from a property that is designed to produce a profit. Calculating a property’s current worth can be done by measuring the quality, durability and amount of income the property is expected to provide in the future.
- Market information – to determine a home’s worth, properties in the surrounding area that are similar to the home are compared.
When determining property tax, all properties in Illinois are required to be assessed at 33 1/3 percent of their market value. Although exceptions to this rule exist, they only apply to farm acreage properties, land with developed coal and properties that are located in an area that uses a classification system for assessment purposes.
During the home purchasing process, buyers may be concerned about how property taxes will impact their finances. Those who are interested in buying a home may benefit from turning to a real estate lawyer in Mount Prospect to determine how much property tax they will owe on their new house.
