Commercial property tax and the mass appraisal method

On Behalf of | Apr 1, 2020 | assessment appeals | 0 comments

Running a small business can be stressful for a number of reasons. To start, you have to find your place in a crowded marketplace, which can be a fight in and of itself. You also need to secure top talent and supply chains that are efficient while keeping costs low. Location is also key. If you’re customers don’t know about your business, then your potential growth may be limited.

Of course, in order to make money in small business you often have to spend money. Renovations, marketing costs, and expansion can all eat into your budget. Sadly, what we find is that far too many of these businesses are prevented from realizing their future due to the property taxes imposed on them. These costs can be crushing to a small business, and many entrepreneurs struggle to find ways to rearrange their budgets to address property tax costs.

Fortunately, you don’t have to simply agree to the tax imposed on you by the government. Instead, you can appeal your property tax assessment. In order to do so competently, though, you need to understand the assessment methodology that is used.

The Cook County Assessor’s Office utilizes what is known as “mass appraisal.” Here, the County looks at a number of factors, including the average rents, vacancy, and expenses, averages the level, and then applies it uniformly to all similar properties in similar neighborhoods. People are often surprised to find that property taxes are not applied based on a property’s unique features, and many find that process to be unfair.

To be honest, the property tax assessment process has been a mystery to the average business owner for years. In 2020, the County expects to release more detailed information about its methodology and utilize market participants to provide feedback. Appealing is tax assessment is also supposed to be made easier, but given the complicated nature of these proceedings, its likely that most individuals will still need the assistance of a qualified legal professional if they hope to achieve the outcome they desire.

It’s no secret that Illinois has one of the highest property tax rates in the nation. However, options exist to allow you to appeal your assessment and save thousands, perhaps even tens of thousands of dollars. You can claim:

  • That your property isn’t uniform or similar to other properties in the area, and you were therefore over-taxed by use of the mass appraisal methodology
  • That you recently purchased the commercial real estate and therefore shouldn’t be forced to pay the full extent of the taxation period
  • The assessor inaccurately calculated the property’s market value
  • The property tax assessed was based on inaccurate information about the property
  • Some unforeseen event has rendered the property worth much less than it was when assessed

When confronting these matters, you’re best off not facing them alone. Therefore, please carefully consider your legal options before proceeding with an appeal of a tax assessment so that you can protect your resources in hopes of securing the future you want for your business.