Last week, Chicago aldermen approved a $589 million increase in property taxes. This record hike, which will be phased in over the next four years, will help fund public safety pensions.
Here’s what your clients need to know:
- Mayor Rahm Emanuel is seeking state legislation to help ease the burden for homeowners by increasing the homestead exemption (nearly doubling it), which means that the majority of the tax increase will affect non-residential property owners. Tax relief proposals are focused on all-residential buildings.
- While there isn’t a tax increase on leases or property transfers, additions to the proposal include fees on garbage collection, on-demand ride services, cabs and e-cigarettes.
- Rents may go up. Keyword: may. Landlords and commercial property owners won’t know exactly what they’ll have to pay until assessed valuations for properties are worked out. Just know that the easiest way to cover the additional cost of a property is to pass on the increase by raising the rent.
- This summer’s tax bill will reflect the increase. Because tax bills are based on property valuation, familiarize yourself with the process to appeal your assessments. And, double check your escrow fund used to pay taxes and ensure there’s enough in there to pay the new amount.
- This tax increase funnels $544 million to first responder pensions, as mandated by the state.