Chicago's commercial owners will pay 46% of the city's tax burden this year, down from about 49% last year, a win in their ongoing battle against the city's property tax system.
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When Cook County Assessor Fritz Kaegi's office completed its reassessment of properties in the city last year, it said that commercial property values grew more than their residential counterparts and that homeowners would be responsible for just 49% of city property tax collections, according to Crain's Chicago Business.
Then came the appeals.
Following an onslaught of requests for corrections, Cook County's Board of Review reduced commercial property values by 17% from the assessor's valuations and residential property values by 1%, shifting the tax burden in favor of landlords and against homeowners, according to Crain's.
Owners of high-value properties almost always appeal their assessed valuations to the county's board of review and win reductions. According to a late 2024 study from the Cook County Property Tax Reform Group group, 97% of all properties worth more than $5M in Chicago appealed in 2021 during the last taxation cycle. Of those, 88% were granted a reduction.
Property tax assessments have been a thorn in CRE’s side for years. Owners have long railed against the Cook County Assessor’s Office for what they say is an unpredictable process that scares investors away from the city and tends to overvalue properties.
Chicago CRE professionals rated property taxes as the city's second-greatest near-term challenge behind safety, according to a midyear sentiment report released last September by the Real Estate Center at DePaul University and the Urban Land Institute's Chicago District Council.
And CRE players say an imperfect system has only worsened in a sluggish postpandemic market, with fewer sales comps to anchor values in reality.
“It’s amazing that there's that much volatility in real estate taxes,” Robert Habeeb, CEO of Maverick Hotels and Restaurants, told Bisnow earlier this year. “Real estate taxes should be up and down on some kind of a median over the long term.”
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