Everyone knows that homeowners pay property taxes. However, many people may not know how the tax system works or the impact it will have on their finances when purchasing a home. With over 3,000 properties and a cumulative value of $2.8 billion, the property taxes in the city of Glencoe represent 0.85% of all real estate value in the county. The average homeowner pays $24,241 in property taxes, an amount significantly higher than the county average, which is $5,866, based upon a median home value of $1.3 million.
A real estate professional like Karen Stroble will be able to explain exactly what buyers need to know, including how to estimate future payments, how taxes are paid, and any possible exemptions that buyers can file for. When homebuyers need to understand the Glencoe property tax system, an experienced agent will help answer any questions that may arise during the process.
How are taxes determined?
One of the first steps in understanding the Glencoe property tax system is to know just how taxes are determined. By multiplying the property tax rate (or millage rate) by the current market value, you'll arrive at the amount to be paid — and it is important to remember that ad valorem taxes, or taxes that are not based on the value of the home will need to be added in. In Glencoe, a city of approximately 9,000 people, the tax rate is 2.68%.
Homebuyers must also keep in mind that property taxes are based on the value of the property as of January 1. Owners can appeal the value between June and December or within 30 days of when the notices are published. The bills are issued on February 1 and July 1, with the first installment being due on the first business day in March. The amount is paid in arrears, meaning that you are paying the tax accrued on your property during the previous calendar year, and in Glencoe, the amount of the first installment owed is generally 55% of the prior year's total tax.
To evaluate the value of a home, one of three approaches is used by an appraiser. Sales comparison compares recent sales prices of comparable homes in the area and is typically the most common approach. The income method is used for assessing commercial properties and assesses the expected lease income to estimate present market worth. Finally, the cost approach, also used on commercial properties, assumes that a commercial property's worth is equivalent to the current cost for a building replacement while considering the depreciation amount as well as the value of the land.
Property tax valuation in Glencoe and what taxes are used for
In the city of Glencoe, governmental units are typically overseen by elected officials or appointees, and the property tax provisions comply with state constitutional rules and regulations. Glencoe sets tax rates while observing statutory limitations, and taxation is done by mailing bills, making collections, enforcing compliance, and handling disputes.
In Glencoe, county assessors set real property market values, and the state of Illinois requires that a reassessment is done at a minimum of once every few years. When a total appraised value is recorded, appropriate tax rates can be determined, and the property tax burden is then set. In Glencoe, property taxes are generally used by the local government to fund public services such as hospitals and transportation, safety, and most importantly — schools. While a significant amount goes towards funding the school district, it is important to remember that a large portion of tax revenue is allocated to city and other governmental employees' wages and benefits. Glencoe also relies heavily on tax revenue for financing the police, street construction, water, sewage treatment works, and garbage removal. It's important to remember that parks and playgrounds also depend upon tax revenue to function.
How are property taxes paid in Glencoe?
One of the biggest questions many new homeowners ask is exactly how their property tax bill is paid. A full year's worth is generally paid at the time of closing. There is no denying the fact that property taxes are high, and many new homeowners are happy to learn that there are potential steps can be taken to help. Installment plan options can help lessen the often stressful burden of taxes by splitting up payments over time and are helpful to those who do not have an escrow account or who own their home outright.
Applying for exceptions
New homeowners must also know about any possible exemptions that may be available to them. An exemption is a reduction in the amount paid and could provide significant savings for those who apply. The homestead exemption is the most common financial protection for homeowners who reside on their property full time. In general, this exemption allows you to take $10,000 off the assessed value of the home. The assessor's office auto-renews the exemption each year after it is applied and provides property tax savings by reducing the equalized assessed value. It applies to a primary residence and can be a single-family home, condominium, or co-op.
A disability exemption is available for those who qualify and provides an annual $2,000 reduction of the assessed value of the home. Applicants must use their residence as their primary home and be the owner or have a legal interest in the home.
Senior homeowners over the age of 65 may be eligible for the senior exemption if they own and occupy their property as their principal place of residence and provides an $8,000 reduction on the assessed value of the home. Like the homestead exemption, it auto-renews each year. Other possible exemptions include veteran exemption, solar/wind exemption, and charitable exemption.
Those who wish to apply for a tax exemption can do so by contacting the county assessor.
What happens with the taxes when a property is sold?
Many new homeowners need to be educated on what happens to the taxes when a property changes ownership. In Glencoe, the tax liability is conveyed with the property, and the amount is prorated between the two parties at the time of closing. Since taxes are paid in arrears, a new owner is given the tax bill for the entire year, and the seller then provides a credit at the closing table.
Understanding property taxes can be a bit overwhelming, and it is important to have an experienced agent who can guide you through the entire process. An agent who knows the area will be able to answer any questions new homeowners may have and provide a detailed overview of how the tax system works in Glencoe. Contact Karen Stroble for more information.
*Header photo courtesy of Karen Stroble
