Chicago Property Tax Assessor’s Mistakes Left $444M Undervalued

A major error in property classification by the Cook County Assessor’s Office has sparked serious concerns among taxpayers.

Widespread misclassifications of hundreds of properties by the Cook County Assessor’s Office lead to unduly low tax bills for many property owners, the Chicago Tribune reported. An investigation by Illinois Answers and the publication found the county missed assessing $444 million in value from 620 properties last year.

The problem affected residential and commercial properties and raised questions about the accuracy and transparency of the county’s property tax system and its impact on owners. While some of the miscalculations have been fixed, many errors stand, the outlet reported.

The misclassification stemmed from mistakes in the way properties were categorized for tax purposes. Many of the affected properties had undergone renovations or are new construction, and the assessor’s records didn’t reflect those changes. For example, a home in Gilmore Park, built in 2021 and sold for $843,000, was still being taxed as a vacant lot, assessed at less than $45,000.

Building permits were not properly updated or incorporated into the assessment data, the outlet reported. A 2019 memo from a high-level staffer warned Cook County Assessor Fritz Kaegi that low staffing levels could lead to problems like this.

But Kaegi tried to put some of the blame on municipalities for failing to send his office building permit data.

“There is a perennial problem with … people who don’t turn in permits or people who, for whatever reason, whether intentionally or not — we don’t get fulsome views of the data,” Cook County Assessor Fritz Kaegi said. “It’s up to us to try to make it better.”

The problem has caused higher tax bills for nearby homeowners. For example, 84 properties in suburban Lynnwood resulted in $33 million in untaxed property value. If they had been counted, the owner of a $250,000 home in Lynwood might’ve received a tax bill that was about $230 lower, the outlet calculated.

On the other hand, when the inaccurate values are corrected, those owners could receive tax bills that are exponentially higher. The assessor’s office can also back tax up to three years, even when the property owner isn’t at fault.

For example, homeowners in Northbrook, whose home was built in 2020 and sold for $1.4 million, paid less than $1,800 in property taxes, even though building permits were filed properly. They received a bill for $93,000 this year, including $67,000 in back taxes.

Kaegi’s office has reclassified 162 properties this year. It also increased the number of field officers from 34 to 38, and it has begun relying on software that compares satellite data over time to help with assessments, the outlet reported.

“The Tribune’s reporting describes work in progress: the efforts of the Cook County Assessor’s Office to solve a decades-old problem with capturing permit data and new construction in Cook County,” a spokesperson for the assessor’s office said.

“Going forward, the assessor’s office will continue to add staff to identify new and missing construction,” the spokesperson added. “We will continue to work with all municipalities and township assessors to ensure that they are consistently submitting permits to our office. We have already conducted a full review of the issues highlighted in the Tribune’s report and will put in place new guidelines for reviewing sales and missing property characteristics.”

— Andrew Terrell

Editor’s note: This story has been updated to add statements from the assessor’s office and clarify that Kaegi blamed municipalities for failing to provide his office building permit data for missing improvement value during assessments.