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Why Property is Assessed Each Year

What drives the assessment process? Don't be confused by the term “quadrennial year.” All this means is real property has to be reassessed, by law, at a minimum of every four years. The real property assessment can change each year due to reassessment or a township multiplier applied at the county level. Even in a quadrennial year, if enough reassessment is not done at the township level by the assessor, the county will apply a county township multiplier. This process is driven by the Illinois Department of Revenue’s (DOR) Sales Ratio Study.

The study is based on an average of three prior years of sale data for a given township. It is done this way so any one year will not skew the results of the study in a particular direction. The study done each year monitors the level of assessment of all good sales (reflects market value) of real property. The previous year's assessment is divided by the current year’s sale price. Ideally it should be 33 1/3% (.3333), which is the state mandated level. If the majority of the sales in the study indicate a level of assessment that is below 33 1/3%, the Illinois Department of Revenue computes a tentative factor to drive assessed values upward in a jurisdiction or township. The inverse is true if the study indicates a level of assessment above 33 1/3%. Each year as the new year of sales enter the study and the oldest year of sales drops out of the study the results are modified by this exchange of data.

If the assessor makes no changes at the township level, all properties within the township will receive the county multiplier. It is applied at the County level and is called a township equalization factor. In a perfect system, if all properties reflected the same level of assessment, this can work, and no property becomes over or under-assessed. Since the Market is constantly changing, this rarely takes place except for maybe short period of time. At the township level, the assessor needs to break the DOR’s Study down to a neighborhood level to monitor the changes in the Market and make appropriate adjustments. For example, if you have one neighborhood where property is selling according to its assessed value, the assessments may need very little adjustment or none. On the other hand, if another area is selling for more than $10,000 over or under the estimated Market Value, these properties have to be adjusted to the proper assessment level. Note sales must reflect market value. No, it is not an exact science, but the assessment officials use market comparison data and statically test data to do the best job possible.

In the two examples above, one can see a flat factor across all properties will not yield the fairest results. If the DOR’s tentative factor is 4%, for example, and the assessor closes the assessment changes for the township with only 2% adjustment, the county will be ordered by the DOR to apply a township equalization factor of 2% more across all properties in the jurisdiction. By now, you see the assessor cannot ignore the DOR’s Study without any impact to assessments. The difference is how it impacts the property in a jurisdiction.

The last important point to make is what takes place when it is not a Quadrennial Year. Other than a Quad Year, if only a township equalization factor is applied at the county level, a property owner will not receive a reassessment notice. There will only be a legal notice printed once in the paper stating the township equalization factor. An owner will not see the assessment change until they receive the tax bill. When the assessor makes all the changes at the township level, all owners impacted will receive a notice. This gives them an opportunity to appeal, if they think the estimate of Market Value is not correct well in advance of the tax bill. This is why Monee Township receives Change of Assessment Notices each year.