Mmm... The Sweet, Sweet Smell of Higher Taxes!
By Olivia Leigh in News on Nov 29, 2006 7:47PM
We’ve experienced renters' guilt by throwing away our hard-earned cash each month instead of pouring it into a home we can call our very own. What with the staggering jumps in home values over the past few years, homeowners who bought a home before the peak of home costs seem to have it made. Higher home values! Tons of cash! Personal piggy bank right there on your lawn!
Unfortunately for homeowners, along with the higher value of homes comes higher taxes, and consequently, higher risks.
In three-year cycles, the Cook County assessor deems the values of Cook County property, with city and suburb assessments falling on different years. Properties were assessed this year in the city, where home values have doubled or tripled across the board. The Civic Federation of Chicago estimates that these increases will translate into an average of 36 percent hike in every tax bill, amounting to $829 or more a year if legislation limiting the increases is not renewed.
A 7 percent tax cap, called the “Expanded Homestead Exemption” is currently protecting county homeowners from high tax hikes for three years, but with the policy set to expire, many homeowners have reason to be praying that cap supporters Mayor Daley, County Assessor Jim Houlihan, Gov. Blagojevich and state Sen. Emil Jones will be able to renew the bill.
Roger’s Park homeowner Leonard Gilbert, who was cited in the Sun-Times, said that his taxes would jump from $4,604 to $6,513 — more than his mortage — unless the protection bill passes. "You don't have any choice — you pay it or you have to move," he said.
And that's where the real danger lies. Nearly $2,000 increases for some homeowners is surely bad news in the languishing real estate market. Especially in Chicago, foreclosure is becoming increasingly prevalent. In the third quarter of the year, the city filed more new foreclosures than any other metro area, with 16,155 properties entering some stage of the foreclosure process.
With the potential for displaced homeowners having to find new homes or apartments in our already very tight and increasingly expensive rental market, we certainly hope the tax cap is renewed. As we're sure Ms. Stewart would say, a healthy (or at least not devastating) housing market is indeed a good thing.