|How to Hold Your Cook County Tax Bill|
QUICK TIPS FOR HOME BUYERSHome buyers especially for first time home buyers, should not panic after looking at a 1st installment tax bill. Sure it looks like a 10% increase over last year. Yes, the tax bill may (probably will?) go up, but for now - it is just too soon to tell. First installment bills are estimates only. They are automatically set at 55% of the previous year's levy. County and Municipal taxing bodies still have to finalize their respective budget processes and the actual tax bills will not be computed or sent out until they do, We should see that in late summer or this fall.
Buyers who are closing on home purchases in the coming months likely will put less money down on the closing table compared to similarly situated buyers who closed in December or January. Mortgage lenders calculate tax escrow deposits based on the number of months until the next tax bill is due. More months till the next bill = fewer escrow dollars collects at closing.
IMPLICATIONS FOR HOME SELLERSImminent tax bills present timing issue for sellers plain and simple. Sellers who pay their own taxes have to decide whether or not to pay taxes now (or asap, anyway), or have them paid at closing (by the title company, from proceeds of sale). That decision really boils down to a matter of cash flow and convenience.
Letting the title company pay is certainly easier in practice and on the wallet. Convenience however carries a price, in this case typically $50 plus any applicable late tax payment fees the County would charge for payments after March 1st.
Sellers paying themselves have the added task of documenting their tax payments for the Buyer,and title company. Best, if possible, to pay asap, and to promptly forward proof of payment to their attorney. Historically, the county has not always been particularly swift in posting tax payments to its website.
Sellers who escrow for property taxes have a different headache scenario - Depending on when the lender sends payment, a closing may be scheduled before the County posts receipt of the payment. Sellers may be asked to hold back money from the sale proceeds until the tax payment can be verified. Sellers and their attorneys should be proactive in their coordination between lender and title company to try to avoid that.
FOR HOMEOWNERS WHO RECENTLY BOUGHT (OR WHO JUST HAVE NOT LOOKED IN A WHILE)This is a great time to double check a couple of things about your tax bill:
Do you have all of the tax bills effecting your property?I have already heard from several people who received a bill for a condo apartment, but not the associated parking space tax bill, or who own homes built on more than one lot who did not get all expected tax bills. Not getting the bill does not excuse payment.
If you did not receive a tax bill that you thought you were going to get, check with the County (and//or your lawyer) to get your address updated with the Treasurer's office.
If you escrow, make sure your lender is paying all of the bills. A shocking number of newly set up escrows may pay the apartment but not the parking (or vice versa), and some manage to transpose digits in the PIN and pay a wrong bill instead.
Are you claiming all available Exemptions?Exemptions lower tax bills. If you qualify, why pay more than you need to.
The homeowners exemption, must be affirmatively claimed for newly acquired properties. If you do not ask for it, you will not get it. Make sure you get it in the first place. Properties that received the Homeowner Exemption last year, will automatically receive the exemption this year if residency does not change.
However, Homeowners Exemptions can be "lost" if an owner transferred title into a land trust, or added someone else into title by quit claim deed. renew automatically from year to year. If you made any changes to your title, make sure you renew the exemption.
Senior Citizen Exemptions, Senior Freezes, Disabled Persons', Disabled Veterans' and Returning Veterans' Exemptions are also available and must be applied for annually.
Applying now, or correcting mistakes now will help assure that tax savings can be realized when second installment bills come out this fall.