Claire Burke did everything to avoid surprise payments. But despite signing up for several property tax exemption programs, she still received an unexpected $4,300 bill in the mail.
The trigger for this four-figure bill? A large notice of reappraisal on Burke’s Chicago property.
According to Cook County, Burke’s home increased in value by $200K in one year, although Burke did not make any changes or repairs.
What made this tax bill extra surprising was the fact that Burke was included in both the Senior Citizens Estate Tax Deferral and the Low Income Senior Freeze Exemption, both of which are meant to keep those types of taxes down.
As a widow on Social Security, the jump from $0 to $4,300 would leave Burke in a vulnerable position. As she told NBC Chicago, this payment means, “I eat less, I work less. I can’t buy anything, I can’t change anything” (1).
To find out why those exemptions didn’t protect her, Burke went first to the Cook County treasurer’s office and then to the assessor’s office. In both cases, officials had no hope, telling Burke he had to find a way to pay the $4,300.
But Burke did not fight. Instead of filing and paying those property taxes, she contacted attorney Glen Gutman through the Chicago Bar Association.
After investigating Burke’s case, Gutman and NBC Chicago found that Burke had not waived his immunity. In fact, she had nothing.
When NBC Chicago spoke with the treasurer’s office, officials said they had not received state funding for the senior citizen estate tax transfer program. Once they receive these funds in a few weeks, they should remove the payment block they received in the mail.
Although this story has a happy ending, it serves as a cautionary tale for homeowners facing surprise property tax increases.
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Although revaluation rules vary by county, Burke’s case shows how lower home values can quickly translate into higher property tax bills.
In Cook County, assessments are conducted on a three-year cycle (2). So, when neighborhood sales prices rise, longtime owners like Brick can see big “paper” increases even if they don’t remodel. Since property taxes are a combination of the home’s equity-assessed value (EAV) and recent county rates, a higher assessment creates a bigger bill (3).
The main way to get relief from high property taxes is to take advantage of local exemptions that reduce the taxable value of your home.
In Burke’s case, she used the senior citizen homestead exemption to reduce the taxable value of the home by $8,000.
She also had a low-income upper-assessment freeze that locked in a higher EAV in the base year for those with incomes below a certain income threshold (currently $65,000). Thus, the increase in market values does not increase the taxable amount.
And Chicago isn’t alone in offering these exemptions to help senior homeowners. As another example, Atlanta created anti-displacement tax funds to subsidize future increases for long-term residents (4).
But even with programs to help seniors, many homeowners are struggling to keep pace with higher property taxes after the 2020 housing boom.
According to the Tax Foundation, property values have grown nearly 27% faster than inflation since 2020 (5), and real estate analytics firm ATTOM found that the average property tax for a single-family home is now $4,172 (6).
Realtor.com also noted that 59.5% of properties in the United States achieved higher appraisals between 2023 and 2024 (7).
Many older homeowners who bought decades ago usually have significant equity but limited cash flow. So, these rapid revaluations are very common and are likely to significantly increase annual spending on already tight budgets.
The issue of property tax increases has become so widespread that legislators in some states are pushing to eliminate them (8). However, instead of betting on the law, today’s homeowners need strategies to prepare for or reduce their property tax bills.
Homeowners may not be able to stop the reassessment, but they have the power to appeal these new rates if they think they are too high.
To build your case, you can look for factual errors in the appraisal report and gather recent sales comps of nearby properties for lower value. Once you’ve built your case, file online through your county assessor or work with a tax appeals firm for personal assistance.
Just remember that the window to file this appeal is short, and it’s usually before you get the tax bill.
As Gutman told NBC Chicago, “The bottom line is when the property gets reassessed, it’s reassessed. The letter comes in the mail, you have to start asking questions right away.”
While homeowners can’t challenge the tax rate themselves, they can reduce their bill through exemptions and assistance programs. Many states offer programs similar to those used by Burke, such as senior housing exemptions, assessment freezes for low-income seniors or tax deferral programs that delay payments until the home is sold.
Because these programs reduce the taxable value of the home or delay payments, it’s important to make sure they’re correctly applied to your bill. Administrative issues, funding delays or paperwork errors like those encountered by Burke can sometimes make it appear as if you owe more than you really do.
If something is missing from your property taxes, contact your assessor or treasurer with questions, and consider working with an attorney if you feel you are not getting what you deserve.
If you need help finding or applying for tax relief programs, Area Agencies on Aging (AAAs) are a good place to find details about these tax benefits.
But even with all these protections, it’s still very likely that homeowners will pay higher property taxes in today’s environment. A simple way to really prepare for these payments is to treat property taxes as a monthly expense, dividing the total by 12 and determining the appropriate amount each month.
If you don’t already use a money management app, consider downloading one to track all your spending and find more effective ways to budget.
We cannot control market trends or tax rates, but discounts and exemptions on property taxes are possible. Taking a few proactive steps, such as signing up for assistance programs and setting aside extra cash, can make all the difference between a manageable property tax bill and a terrifying financial burden.
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NBC Chicago (1); Cook County Treasurer (2); Illinois Department of the Treasury (3); Atlanta Investments (4); Tax Foundation (5); PR Newswire (6); Realtor.com (7); AP News (8)
This article provides information only and should not be used as advice. It is provided without warranty of any kind.
