When you become a homeowner, you take on many new responsibilities. One of them is paying property taxes. Knowing how your property taxes work, what causes them to go up and down and what exemptions are available is important – and that knowledge can even save you money.
Three things determine property taxes: The assessed value of a home and the local property tax rate state equalization rate. Of course, within that, there are a million moving parts and any number of things that can result in higher taxes. Here are a few things that can cause your property taxes to increase:
1. State and Local Budget Increases
Because many local governments receive the majority of their funding through taxes, any state and local budget cuts directly affect property taxes. In order to make up for the deficits they’re experiencing in budget cuts, governments oftentimes raise property taxes. The money collected from property taxes is usually used to fund fire departments, schools, libraries and other community services, so when funding for those services are cut, property taxes tend to go up. The only thing that the public can do to attempt to change this is to vote for elected officials who won’t raise property taxes and to vote on their schools’ budgets.
2. State Employee Benefits
This is closely related to the budget cuts above. Property taxes are used to pay for essential government services. For example, in Chicago, $45 million of the recent property tax increase is earmarked for the Chicago Public School system, while another (undisclosed) amount of the property tax hike is going towards the Chicago Police Department pension program.
3. Converting an area into a living space
Your home’s available living space determines what buildings are considered ‘comparable properties.’ Traditionally comparable properties with more living space tend to have significantly higher assessed values. Take this into consideration when remodeling an attic or basement.
Don’t settle for paying higher property taxes than you have to. Although property taxes can’t be avoided, you can contest the assessment of your taxes and possibly reduce the tax liability that you owe. You have 2 opportunities to appeal your Cook County property taxes every year. Visit http://diypropertytaxappeal.com and see how easy it is to contest higher taxes yourself!