Real Estate Tax Prorations

How Does Reassessment Affect Your Real Estate Transaction?

Although property taxes are a sticking point in any transaction, not being aware how tax prorations can vary in a reassessment year may cause your deal to collapse, the property’s listing to become stagnant and/or unhappy clients. 2019 is the reassessment year for the North Suburbs of Cook County and start of the new quadrennial assessment cycle for the Collar Counties such as DuPage, Lake and Will.

Most attorneys and brokers have a habit of prorating property taxes at 105% or 110% of the prior tax year at contract submission or during attorney review. Unfortunately, these percentages are not reasonable when a property is being reassessed because the resulting property tax liability may be substantially higher than in prior years. Referring to my post titled Cook County Tax Reassessment of Chicago, as an example, median percentage increase for Lake View township was 31.24% and the proration percentage will need to be greater than 110% to allow for the fair treatment of the property’s anticipated real estate tax liability and inherent timeframe.

Since every property and transaction is unique, our subject matter expertise ensures that property taxes will not negatively impact any of the parties to the deal, from listing to negotiation to closing.

Contact Dimitrios P. Trivizas, Ltd. for straightforward solutions to tax prorations.

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As we specialize in property tax relieftax incentives and zoning, contact us for a free consultation about your property.