Real Estate Tax Information

Protect Your Property Rights
and
Avoid Tax Penalties

Whether you are buying an existing home or are buying new construction, there are some important things to know about taxes on real property and about real estate tax bills in order to protect your property rights:

• Frequency: How often real estate tax bills are issued.
• Determination of Amount: How the amount of your tax bill is determined, depending on your county of residence.
• Payment: When your tax payment is due.
• Action: How to get the tax information you need to protect your property rights.

You need to know how to obtain current real estate tax billing information and when your tax bills will come due so they can be paid in a timely manner so as to avoid tax penalties. If you have established an escrow for taxes with your lender, mail a copy of your tax bill to the lender, and keep a copy for yourself. You should call the county twice each year to verify that your lender is paying your tax bill out of the escrow. Late tax payments generally accrue interest at the rate of 1 ½% per month. If tax bills are not paid in a timely manner, they can also be "sold" by the county, causing you more time and expense to "redeem" the sold tax bills to avoid liens on your property.

A. Buyers of     Existing Homes

Buyers of Existing Homes will be responsible for paying all real estate tax bills that come due after the closing date. Taxes in Illinois are paid in arrears, i.e., one year after they are assessed. Credits received from a Seller at a closing for taxes will be shown on your RESPA statement, also known as the HUD-1 statement. Taxes are billed as follows:

• Cook County: Two installments of taxes due per year:

1) first installment bill is mailed in February, and is due in March. (This is an "estimated" bill equal to one-half of the prior year's total tax bill.)

2) second installment bill is mailed in August, and is due in September. (Any adjustments for the tax year will be reflected on this bill.)

• All other counties: Generally mail one tax bill per year, usually in May:

1) first installment is due in June. (One-half of total year bill.)

2) second installment is due in September. (One-half of total year bill.)

NOTE: The first bill to come out after the closing often is sent to the Seller. IT IS YOUR RESPONSIBILITY TO PAY THE TAXES ON YOUR PROPERTY WHETHER OR NOT YOU RECEIVE THE BILL, SO YOU MAY WISH TO CONTACT THE COUNTY TO OBTAIN A DUPLICATE COPY OF THE TAX BILL. WHEN YOU CALL OR VISIT, BE SURE TO HAVE YOUR P.I.N. (Permanent Index Number) AVAILABLE.

B. Buyers of     New Construction

Buyers of New Construction have somewhat different concerns. Sometimes the Builder pays the tax bill from the closing year because the lots in the new subdivision may not yet have the individual tax parcel numbers assigned which are necessary to allow individual bills to be generated. CALL your builder when the tax bills come out in your area to see if they are getting the tax bill and paying it or if it is being mailed to you.

You will be responsible to pay the tax bill for the closing year when it comes out the following year. If you have a separate reproration agreement with your builder, your builder may be obligated under it to reimburse you for a portion of the closing year tax bill, but the county will treat you as responsible for the entire tax bill. Therefore, to avoid endangering your property rights, you may wish to pay the entire bill first and then seek reimbursement from the builder for the builder's portion. (NOTE: this issue may be addressed in your contract with your builder, or in a separate reproration agreement, if your builder has agreed to one.)

Permanent Index Number;

Your Permanent Index Number (or "PIN") is the number assigned to your specific real property for tax purposes by the county in which you reside. You will need your Permanent Index Number in order to access any information from the county assessor’s office or to obtain a duplicate tax bill. You may wish to make note of your Permanent Index Number for future reference.

Here, for your reference, are some telephone numbers of County Treasurer’s and Assessor’s offices in the Chicago area. You can call the office for your county of residence and, with your Permanent Index Number, obtain current information concerning payment of taxes on your property.

Local Township Assessor Numbers

© 2005, Law Offices of Ralph J. Schumann.