Where Do My Property Taxes Go And How Does It Affect My Home Personally?


by Charles McShan



1 U.S.A dollar banknotes


Hello and Happy February to one and all.

This is Charles McShan with Century 21 Universal in Chicago. This question of where my property taxes go and how it personally affects my home The above photo reminds me of that classic O’Jays song. ” Money money money monnnnney, dollar bills yall go head” Yes, these dollars are what this country or any country needs to collect so they can operate or perform their duties. Sometimes when I show a client a listing sheet and show them the taxes, one or two might ask me.do we pay these taxes only once? I told him no, you must pay this yearly. Some of them turned pale, and then I realized that I did not go into details with him about how property taxes are paid. That is the purpose of this Blog-post entitled “Where do my property taxes go and how do they affect my home personally?”. before we do that, let us do a quick review of where we are with the local taxes in our area.

We are into year two of the coronavirus pandemic. In the first year, specifically March of 2021, the Government ordered a shutdown of all forms of business to try and contain the spreading virus. People were forced to stay home. Many suffered economically. They were not able to pay their rent or mortgage payments. The Governments stepped in with unemployment checks, stimulus checks, and other forms of assistance. In the meantime, the government could not collect all the back taxes from everyone. They had to keep paying their employees and provide vital city, county, state, and federal services. The Spring of 2021 was a disaster, summer the situation started to improve. Autumn found many people going back to work because the checks stop flowing and all the moratoriums cease.

Suddenly inflation crept, and the omicron coronavirus variant was upon us by the Thanksgiving holiday. We got thru Christmas and New Year, and here we are in February of 2022. It is a known fact that interest rates will rise this year, and we also know that to make up for the revenue loss for the year 2021, property taxes will have to rise. So this blog will deal with property taxes.1: Why do we have to pay property taxes. 2. How do these taxes affect me as a homeowner personally.

Why Property Taxes Anyhow?

Well, that goes into the subject of why we have to pay taxes anyhow. Taxes that word goes back to the beginning of civilization.No one likes to pay taxes In Jesus Christ’s time, the religious leaders questioned him over who should pay the head tax at Matthew ( ). From the beginning of human governments collecting taxes was a part of life. Through paying taxes, all forms of governments agencies do their jobs. by performing their services

Yes, our taxes pay for our military, roads, and countless other things that we take for granted but let’s not go off subject. We want to keep this topic specifically on property taxes in the state of Illinois. Illinois property taxes are the financial backbone of local governments. That collected money pays all local schools’ operations, police fire, medical emergency parks, and other services. For example, today is February 2nd, 2022. The Chicagoland area has experienced its worst snowstorm of the year. But the city, county, and state snowplows are on the roads pushing the snow aside. The salt being dispersed from the back of those trucks is also paid by your property taxes. So are the street lights on at night to guide your way

Those once full CTA buses and those almost always empty Pace buses going down suburban streets are also funded thru your taxes. Add to that your property taxes also cover legal payouts for misconducts and personal injury lawsuits as well as the salaries of the elected public officials. So when you think about it, every city, county, and state service that is provided for you comes from your taxes, whether income, property, or special localized tax. If these taxes were not available, your services would halt or be seriously cut back.

How Do These Taxes Affect Me As A homeowner Personally!

Yes, those services above are only some of the things property taxes cover. Homeowners and businesses pay these taxes within the area and apartment landlords. In their monthly rent payments, owners of apartment buildings pass their share of taxes down to their tenants. Now let’s look at it from a homeowners’ point of view. Your property taxes are based on the fair market value of your home. This value is calculated through an appraisal process called assessing property value. The more your property is worth, the higher your taxes will be. Also, if you renovate or remodel your homes, your taxes will rise.

 Businesses will pay their fair share of property taxes, and they do not mind if they are money. If you sell products that people need and desire, they will travel far and wide to your place of business, and those taxes will go into the local county treasury. Back then, certain Southern Cook County suburbs once had huge shopping malls booming in the 1980s into the early 2000s. The taxes those malls produced benefitted the towns they were located in. These malls allowed the local governments to keep the local homeowner’s property taxes low. Then everything changed. Shopping patterns changed the internet, and Amazon emerged out of nowhere. Stores such as Sears Robuck, Montgomery Wards, and others went out of business. Many malls closed, and the tax base they bought in evaporated. Now the burden of the taxes shifted onto the local homeowners. I will not mention the names of those towns, but some have fallen upon hard times. The loss of business property taxes will do for a community. For the most part, the homeowners will not pick up the slack of the loss of the big-box businesses that leave the community. Budget cutbacks follow along with a reduction of city services.

Now let’s address the single-family homeowner. Two times valuations will affect your property

1: The Assessed The Value Of A Home!

The assessed value of your home is the approximate property value that your local government uses to determine your property taxes. They try to stick to a formula in the interest of fairness. Also, your tax rate will be based on what your local taxing districts will need to operate during the coming year. In Cook County, homeowners can expect a three-year window between assessments. When calculating home property taxes, county governments, namely the assessor office, look at the value of your home, lot size, square footage, and other factors. Finally, in Cook County, they will assess property value as 10% of the fair market cost. The more your property is worth, the more taxes you will pay. The assessed value is not necessarily the same as your appraised or fair market value, as county assessors use different formulas to calculate home values. This assessment from the government could have you owing more on your property taxes than you might expect. Some homeowners get upset by these real estate county assessments because their assessments could exceed your lender’s approval or your real estate agent’s CMA.

The market value of a home!

The market value, or as they call it, the fair market value: is defined as how much money you could get for your home if you put it on the market to sell. Your local Real Estate Agent/ Broker will search comparable listings that have sold recently in the area. Like the assessor before and the appraiser who will come later, they all will look at the size of the home along with the amounts of bedrooms, baths, and other factors. Once you gather all this information, you confer with the homeowner and come up with the selling price for the home.

The Appraisal Process!

I just covered this part of the real estate transaction in a recent blog post, so I will not repeat everything I wrote there, but I will say this. Appraisal plays a different role. Lenders use home appraisers to confirm that the property the home buyer desires is not overpriced and that they can recoup their money; if the homebuyers default on their mortgage their report will be more thorough than a CMA, and they will require access to the property, whereas the government assessor does not. If you wish to know more about the appraisal process, check out my past blog post on that subject >>click here.

How do these taxes affect my wallet personally?

Good question! First of all, you have the right to know how much tax you pay on your home. Contact your local county assessor’s office, and they will send you copies of your property’s assessment records. If you feel your assessment is too high, stand up for yourself. A lot of people say you can’t fight city hall. Give it a shot first. Request a reassessment, check for inaccuracies, look at local comparisons, and see if the assessor made mistakes. In most cases, most people who contest do not win, but some do, and if you do not put up the fight, you will be guaranteed not to be one of them.

 Certain Illinois towns have colleges within their borders and do not pay property taxes. Those homeowners, along with the businesses, have to absorb those costs. So if you are a home buyer and are thinking about moving into a particular town or village with a college, do your homework before making that final decision. That same rule will apply if you are thinking about moving into a town where most businesses have left the area due to many factors. The taxes might be low, but city services could also be less than you are used to. areas with superior school systems will normally have higher taxes used to pay the salaries of good teachers to work and live in that area. 


No one wants to pay higher taxes, but there are always tradeoffs. For the homebuyer, the mortgage officer will always instruct them to look for a home with low property taxes, but they might fall in love with a home that has higher property taxes. Some have realized that they cannot afford a single-family home with the large property tax that comes with it for now. All is not lost. Purchase a townhome or a condo for now and work up to that single-family home in a few years. The time is now to buy. Like I said earlier, property taxes along with interest rates will be going up.

You apartment renters out there. In Chicago 3 years ago, a three-bedroom rental cost around $1.200 to $1.500 a month, depending on location. Today in 2022, they are renting out citywide from $1.500 to $2.400.Because of certain renters not paying their monthly bills last year, new renters must have almost a 700 or higher credit score. Chicago, in time, will be just like New York City, Los Angles, and San Franciso; it is getting harder to pay rent here. Rental prices will continue to rise. They are now equal or, in some cases, have surpassed an actual mortgage payment. So before you renew your rental lease in May or October, please reconsider your options. 

For you homeowners thinking of selling your home you are still in the driver’s seat. Is there a wave of foreclosures about to hit the market as it occurred back in around 2008? The experts say no but no one but God can predict the future and he is not in the housing business. One thing is for sure., we are still in a seller’s market. There are clients out there with cash in hand or have the mortgage loan to purchase your home and your home and those high property taxes that come with it. So if you are ready to sell, put that home onto the market.

So in conclusion, this blog post was for those who asked.” Where do my property taxes go, and how does it affect me personally”. If you did not have a good understanding of how those taxes benefitted you personally and your community I hope you do now. Everyone knows the local colors of their snow plows and they smile when they see them clearing the streets of snow and ice. Those are your tax dollars at work. They allow your garbage to be picked up, those potholes will be patched, broken water pipes to be repaired and they allow your public schools will remain open. Your park districts, your forest preserves, police fire, and paramedics all are maintained by your tax dollars. All those services benefit us. It might affect you more personally if you are a local government employee you also get paid as a result of those taxes collected in your community. Yes in the state of Illinois property taxes along with other forms of taxes are high. They are not going down so if you are not planning to move out of the state you have to be like the rest of us and deal with it. As they say, death and taxes. Taxes will be with us until Judgement day. they are part of any real estate transaction. So with that being said whether you are a homeowner, homebuyer, or apartment dweller thinking about buying a home; please contact me. My job is real estate. My office is located at 7300 N. Western Ave in the West Ridge neighborhood of the city of Chicago. Stop by one day for a cup of coffee. I will keep the light on for you Until the next time, take care and stay safe.                                                                                                                   

                                                                                      Charles McShan

                                                                                      [email protected]





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