COVID-19 Adjustments to Property Values

The economic impact of the COVID-19 novel coronavirus affects almost everyone in the United States.  Even for those fortunate enough to have stayed healthy and employed during the pandemic, reminders of the virus and its effects on the economy are everywhere.  Federal, state, and local governments have offered many initiatives to help lessen the economic burden on families and businesses but helping homeowners and commercial property owners keep up with mortgages and property taxes remains a big challenge.  In the Chicago area, the Cook County Assessor’s COVID-19 adjustments could lessen the burden on the owners of residential and commercial real estate properties.

Why and How the Cook County Assessor’s Office Made the Adjustments

Property taxes are calculated based in part on property values at the end of the previous year.  That means that in 2020, real estate owners must pay property taxes based on the pre-pandemic values.  At the end of 2019, property values were continuing to rise, but once the pandemic hit the real estate market stalled.  To provide some relief to property owners, the Cook County Assessor’s Office is undertaking property tax adjustments to real estate properties located in suburban areas of southern and western Cook County.  It has plans to make similar COVID-19 adjustments for properties in the City of Chicago and northern Cook County after completing appeal processing for these townships.

Adjustments to Residential Property Values

For single-family homes and condominiums, the property tax adjustments will range from eight percent to 12.2 percent.  One factor in determining the adjustment for residential properties is the rate of increase in unemployment in each residential property’s immediate area since historically, rising unemployment has correlated with falling home values.

Adjustments to Commercial Property Values

Some commercial properties, such as supermarkets, have thrived during the COVID-19 pandemic, while others, such as hotels, offices, and dine-in restaurants, have experienced major setbacks.  The adjustment in property taxes for real estate rental properties (2-6 units) will range from 10 to 15.2 percent.  For commercial properties like offices and retail stores, the percentage of adjustment will be factored into the new capitalization rates used to determine the value of such real estate.  It is calculated as the income the owner receives from the property divided by the value of the property.

2^nd Installment Tax Payment Deadline Extension

The Cook County Assessor’s Office has extended the due date for the second installment of 2020 property taxes until October 1, 2020. It will also not apply late fees to taxes paid after the August 1^st deadline until the October 1^st deadline.

What the COVID-19 Adjustments Could Mean for You

COVID-19 property tax adjustments will help everyone to benefit from lower property taxes in 2021, and not just property owners with the means to file a property tax appeal. Based on the extent of the pandemic, these adjustments may only be temporary, lasting only one year or until the end of the township’s reassessment cycle; no one knows.

With this in mind, if one knows that they can benefit from the appeal because their property is being overvalued or overassessed they still need to be sure to file an appeal since all property tax reductions obtained as part of any appeal will be permanently applied. Plus, any tax reduction received as part of the appeal will be cumulatively applied to COVID-19 property tax adjustment. “Accordingly, the CCAO is treating all property owners as if they formally appealed their 2020 assessments based on COVID-19’s impact on their property value”- Cook County Assessor.