Appealing Property Taxes?

8 Replies

I haven't seen much discussed about property taxes, and maybe it's just a concern to me because of where I live. Cook/Will counties in Illinois of some of the highest property tax rates in the country, the property taxes are usually the biggest thing that make most deals really bad that I've analyzed. I see Brandon doing a live analysis on properties that have like $967 property taxes annually. That's insane to me. I've never seen anything lower than $2000 and everything that is in the $2000's is always the upper 2000's. Close to triple what I'm seeing him find.

I don't know how property taxes are done in the rest of the country, but here, the system is intentionally designed to over assess people's houses to either a) make them pay more, or b) make them higher a tax attorney to get their taxes lowered. "A" obviously means more money for the county so that's why they do that. But why would they do "B"? Because the assessor takes campaign contributions from tax attorneys (google Joseph Berrios, I'm glad he's gone now).

I've seen zero discussion about property taxes so I was wondering, what do people do about this? Do you just accept what the county wants you to pay? Do you fight it? How often do you try to fight it? How much time, energy, and money is spent trying to get your property taxes corrected? Is this only a problem in a few counties around the country or is this a common practice everywhere?

I just sold a 2 bed room, 1.5 bath, 1,100 sqft condo that I lived in for 2 years, I bought it for $85,000 and my property taxes were over $4,200.

Updated almost 3 years ago

I remember before I bought that condo I was looking at a 3 bedroom, 2 bath townhouse for ~200,000. The property taxes were over $10,000. The property taxes alone are over half of what you could expect to get for rent every month, and that's before you even consider vacancy, maintenance, capex, principal, interest, and insurance.

In Cook, you should be appealing them at every opportunity you get. Hire a lawyer to do it that specializes in tax appeals. it will still save you money, even after their fees. that's what we do in Cook
I am in the process of appealing my taxes in NJ. I have to admit, I giggled a bit when you complained about "upper 2000s" when it comes to property taxes 😉. My $55k purchase price rental is taxes at $5300 per year. I'll he thrilled to get it to $4500. Being owned by an LLC, I had to hire an attorney, so we'll see how it goes.

@Nicholas Layton - pretty much everyone I know contests the taxes.  There are tons of law firms that only do tax appeal.  I contest mine every year

Nicholas,

Every county is different. In my area, there is a formula based on the assessed value. Almost all of the properties I purchase has the assessed values set years ago when the market was through the roof.

In our area we have to file appeals by July 30th. Before doing this though , we have to make sure that we understand the market value. We may want the taxes to go down but if you don’t do your homework, taxes can actually be raised during the appeals process.

We have appealed approx 12 to 15 per year as we win almost every time. Again, it’s because I know what the value should be and we go on prepared.

Originally posted by @Jason D. :
I am in the process of appealing my taxes in NJ. I have to admit, I giggled a bit when you complained about "upper 2000s" when it comes to property taxes 😉. My $55k purchase price rental is taxes at $5300 per year. I'll he thrilled to get it to $4500. Being owned by an LLC, I had to hire an attorney, so we'll see how it goes.

 No, you misunderstood. I didn't say the property taxes are normally upper $2,000s. I said the absolute lowest that I've ever seen in the area was upper 2000's on a real dump of a place. A 2 bedroom condo is over $4,000, and a 3 bedroom townhouse I looked at was over $10,000.

In Saint Clair County Illinois the time period to file a protest has been different almost every year. 

They got us in the habit of filing every October, then they made that the filing deadline.

This year I was able to file an appeal the day I made my first Real Estate Tax installment payment.

You should file an appeal each year. but especially after you get a notice of assessment in the mail.

Here's an exmaple of what I'm talking about... I thought I found a good deal, not for a BRRRR, but at least for a rental property: https://www.zillow.com/homedetails/654-Cambridge-A... Until I got to the property taxes... $5,188! For a 2 bed 1 bath SFR. These property taxes are killing me.

Zillow estimates $1,500 for rent, but I don't think that's correct. I've seen 3 bedrooms in that area going for less than that.