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Property tax assessments slide, but not tax bills

Mark Armstrong, Kane County supervisor of assessments, speaks during a tax assessment workshop Tuesday night at the Kane County Government Center in Geneva. Property assessments in Kane County continued to decline in 2013, even as some market segments saw some glimmers of recovery.
Mark Armstrong, Kane County supervisor of assessments, speaks during a tax assessment workshop Tuesday night at the Kane County Government Center in Geneva. Property assessments in Kane County continued to decline in 2013, even as some market segments saw some glimmers of recovery.

Uwe Rotter has heard the tales about increasing home prices.

But Rotter, the longtime assessor in Blackberry Township, doesn’t know how local homeowners and property taxpayers should receive the news.

“The indications, at least, are that values, in some areas, are increasing again,” Rotter said. “But for taxpayers, the biggest concern is not the value of their homes.”

This year, local real estate sales data revealed a steady increase in home values in the region.

The Illinois Association of Realtors, for instance, reported that through the first eight months of 2013, the median home price in Kane County increased 10.2 percent, from $147,000 to $162,000.

However, at the same time, the taxable values of the home will lag behind this year.

Countywide, data supplied by the Kane County Supervisor of Assessments Office indicated that taxable assessed values declined by about 6.5 percent compared to 2012.

The actual amount of decline varied sharply township to township, Kane Supervisor of Assessments Mark Armstrong said.

In Rotter’s Blackberry Township, assessed values declined by about 2 percent.

In St. Charles, Geneva and Batavia townships, assessments declined by an average of 3 percent to 4.5 percent.

But in Virgil, Big Rock and Kaneville townships, assessments slid on average by 9 percent to 14.5 percent.

Armstrong said the variance results from a number of factors, including how many homes may be for sale within a neighborhood.

However, the declining assessments do not mean that the real estate market will take a turn for the worse, Armstrong and Rotter said.

The reason lies in the way assessed values are calculated. Under state law, assessors must use market values on comparable properties over the previous three years to determine what a particular property’s value is for taxation.

That means that in times of changing property values, property tax assessments lag behind.

That effect was seen in recent years, as homes lost 15 percent to 30 percent of their value, but their assessed values remained far more stable. In coming years, it may mean assessed values will again increase.

And at that point, homeowners may not like what they see on their tax bills, Rotter said.

As home prices declined, property tax bills consistently increased for most taxpayers.

This year, for instance, the average property tax bill increased again, by about 2.3 percent from 2012, rising to $6,245 per home.

The increase was primarily driven by decisions by local governments – and particularly school districts, whose property tax levies account for almost two-thirds of a typical homeowner’s property tax bill – to either increase the amount they collect in property taxes or hold their tax levies steady.

As property values decrease, it means those tax levies are spread over less valuable property, thus spiking property tax rates and forcing homeowners to pay more.

However, while tax bills have risen even as property values have declined, increased property values also could result in more expensive property tax bills, Rotter said.

And that, in turn, could again spur many homeowners to attempt to challenge their assessments.

Since 2011, the number of property tax assessment challenges in Kane County have decreased by about 20 percent, Armstrong said.

And in Blackberry Township, Rotter said assessment challenges declined from 48 last year to 21 this year.

“The reason is that assessments take about 18 months to catch up with the market,” Armstrong said. “People have been seeing their market values going up, but seeing their assessments decline.”

Rotter said he feared the negative consequences for the local housing market should tax bills rise quickly as property values recover.

“It’s the taxes that scare people away,” Rotter said. “People say, ‘I can live cheaper somewhere else, for the same amount.’ ”

He said he has discussed the matter with representatives of other taxing bodies, encouraging them to find ways to relieve the burden on their taxpayers.

But he said, to date, the situation is unchanged.

“Unfortunately, whether home prices go up or go down, the money has to come from some place,” Rotter said.

By The Numbers

How much did assessed home values slide in your township in 2013?

Geneva – 4.5 percent

Batavia – 4.5 percent

St. Charles – 3 percent

Blackberry – 2 percent

Campton – 4.75 percent

Sugar Grove – 4.5 percent

Aurora – 11 percent

Kaneville – 14.5 percent

Virgil – 9 percent

Big Rock – 10 percent

Source: Kane County Supervisor of Assessments

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