Cook County Property Taxes

Cook County bills property taxes in arrears and in 2 installments.

 

The First Installment property tax is due the first business day in March. The First Installment is 55% of the prior year’s full tax bill. The due date for the Tax Year 2018 First Installment is Wednesday, March 1, 2019.

 

The Second Installment due date varies. This is because the Second Installment bill relies on the delivery of various sets of data by other state and county agencies. Unlike the First Installment bill, the Second Installment bill reflects the new assessed values, assessment appeals, exemptions, the state equalization factor, and taxing-district tax rates. All of these data are prepared by other state and county agencies. The due date for the Tax Year 2017 Second Installment was Wednesday, August 1, 2018.

 

When a property is sold, the seller will not be current with their taxes because taxes are billed a year behind. Therefore, at closing, the seller will customarily give the buyer a credit as shown in the sample calculations below. The buyer will then have money from the seller to pay these tax bills when they are billed. Cook County bills the current owner, regardless of who
owned the property during the tax bill term. We usually see a tax proration of 105-110% of the last full year’s tax bill and it is usually negotiated during attorney review. The assumption is that future
tax bills will be higher than the prior year’s bill. Note, in a short sale or foreclosure transaction it is typical for taxes to be prorated at 100% (no potential tax increase is assumed or credited to the buyer).

Here are some examples of how the prorations could work:

 

CLOSING DATE: FEBRUARY 28, 2019
2017 Taxes = $6,000
110% proration = $6,600
$6600 / 365 days = $18.08 per day
Seller wouldn’t have paid for any of 2018’s taxes yet (365 days), and would owe for 59 days in 2019, 424 days total.
424 x $18.08 = $7,665.92 credit to buyer from seller at closing

 

CLOSING DATE: APRIL 30, 2019

2017 Taxes = $6,000
110% proration = $6,600
$6,600 / 365 days = $18.08 per day
Seller would have paid for the 1st Installment of 2018 on March 1, but still owes for the 2nd Installment (184 days), and would owe for 120 days in 2019, 304 days total. 
304 x $18.08 = $5,496.32 credit to buyer from seller at closing

 

CLOSING DATE: JUNE 30, 2018

2017 Taxes = $6,000
110% proration = $6,600
$6,600 / 365 days = $18.08 per day
Seller would have paid for the 1st Installment of 2018 on March 1, but still owes for the 2nd Installment (184 days), and would owe for 181 days in 2019, 365 days.total.
365 x $18.08 = $6,600 credit to buyer from seller at closing ($6,599.20 depending on how numbers are rounded)

CLOSING DATE: AUGUST 31, 2019

2018 Taxes = $6,000
110% proration = $6,600
$6600 / 365 days = $18.08 per day
Seller would have paid for the 1st Installment of 2018 on March 1, and the 2nd Installment of 2018 on August 1st, but would still owe for 243 days in 2019.
243 x $18.08 = $4,393.44 credit to buyer from seller at closing

CLOSING DATE: OCTOBER 31, 2019

2018 Taxes = $6,000
110% proration = $6,600
$6600 / 365 days = $18.08 per day
Seller would have paid for the 1st Installment of 2018 on March 1, and the 2nd Installment of 2018 on August 1st, but would still owe for 304 days in 2019.
304 x $18.08 = $5496.32 credit to buyer from seller at closing

 

CLOSING DATE: DECEMBER 31, 2019

2018 Taxes = $6,000
110% proration = $6,600
$6600 / 365 days = $18.08 per day
Seller would have paid for the 1st Installment of 2018 on March 1, and the 2nd Installment of 2018 on August 1st, but would still owe for 365 days in 2019.
365 x $18.08 = $6,600 credit to buyer from seller atclosing ($6,659.20 depending on how numbers are rounded)

Stephanie Cutter Group

1910 N Clybourn Ave, Chicago, IL 60614

Office: 312-475-3274 | Text Line: 773-888-3372
stephanie@stephaniecutter.com

 

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