Property Tax Math

Illinois is a “budget, then tax” state. This means that taxpayers are not charged a set rate of their property value. Instead, they pay their share of their districts’ levies.

There are three primary factors in calculating a property tax bill: 

  • The equalized assessed value of the property (EAV)
  • The levy extended by the taxing districts where the property owner resides, and
  • The total equalized assessed value of the properties within those districts

Here’s an example where a property owner has a house valued at $350,000.

  • The assessed value of that house is $35,000. This is because residential property is assessed at 10% of its value in Cook County.
  • The state equalization factor hovers around 3. This is multiplied by the assessed value of a property to get its equalized assessed value (EAV). In this case, the home’s EAV would be $35,000 × 3 = $105,000.
  • The taxing districts extend a combined levy of $40 million to fund their services.
  • The total value of the properties in the property owner's jurisdiction is $500 million.
  • To calculate the tax rate for that area, the Clerk divides the levy by the total value of property in the jurisdiction. In this case, the $40 million levy divided by the $500 million of value results in a tax rate of 8%.
  • Finally, multiply the tax rate by the EAV of the property to calculate the bill. $105,000 × 8% = an annual bill of $8,400.

But wait! What if I have an exemption?

A homeowner's exemption—the most common one—reduces the equalized assessed value of a home by $10,000. This comes out of the $105,000 in the example above. The EAV is now $95,000. If it's multiplied by 8%, the new bill is $7,600. In clearer terms, the exemption reduced the property owner's bill by $800.

Because of the complex way these numbers interact in the calculation, bills do not always change in the way one would expect. If all homes in a neighborhood experience an increase in their assessed values, their tax bill could still decline if the amount of money local governments request stays the same. Neither increases or decreases in property value always mean that a tax bill will rise or fall.