How Chicago Property Taxes Are Actually Calculated

I get a version of the same phone call every few months. A client looks their home up on the Cook County Assessor's website, sees an "assessed value" of $45,000 on a condo they paid $450,000 for, and calls me convinced either they massively overpaid or the county knows something they don't.

Neither is true. In Cook County, the assessed value is supposed to be about a tenth of what the home is worth. It's one step in a calculation that has a lot more steps than most people realize.

This post walks through all of it: how the county decides what your home is worth, how that turns into a bill, where the money goes, and what it means if you're buying or selling.

One thing to know first. In Illinois we pay property taxes in arrears, so Cook County bills a year behind. The bills Chicago homeowners paid in 2026 were for tax year 2025. When I mention a tax year below, that's what I mean.

Who decides what you owe

Most people blame the Assessor for their tax bill, but the Assessor only controls one part of it. Four offices are involved:

• The Cook County Assessor estimates what your property is worth and handles exemptions.
• The taxing districts (CPS, the City, the Park District, the county and a few others) each decide how much money they want to collect that year. That amount is called the levy.
• The Cook County Clerk turns those levies into tax rates.
• The Cook County Treasurer sends the bills and collects the money.

The Assessor's value decides your share. The levies decide the total.

A made-up example makes this easier to see. Picture a tiny town with four houses, each worth $500,000, and a school that needs $40,000 a year. Each house pays $10,000. The next year all four houses go up to $600,000, but the school still asks for $40,000. Each house still pays $10,000. Values went up 20%, and nobody's taxes moved, because the rate went down.

Now say one of those houses goes up to $700,000 and the other three stay at $500,000. The school still needs $40,000, but the house that went up now carries a bigger share of it. Its bill rises to about $12,700, and the other three drop to about $9,100. That's what drives most bill changes in real life. It isn't whether your value went up. It's whether it went up more or less than everyone else's.

The formula

Every residential bill in Chicago runs through the same five steps. Here they are for a home the Assessor values at $300,000, using the real tax year 2025 numbers:

The Chicago Park District uses the same example on its own site and gets the same $5,544. Without the Homeowner Exemption, that home would pay about $6,230.

A few things about those numbers that trip people up:

The 10% is the assessment level, not the tax rate. Homes, condos and apartment buildings are assessed at 10% of market value. Commercial and industrial property is assessed at 25%, which comes up again later.

The Homeowner Exemption is $10,000 off your taxable value, not $10,000 off your bill. What it actually saves you depends on the tax rate, which is why you hear different numbers for it. At the 2025 city rate it was worth about $685. On my own bills it's been between $660 and $690 the last two years.

The 6.853% is the general city rate. Some properties pay slightly more because they're also in a Special Service Area, or SSA. An SSA is a small taxing district the City sets up, usually along a commercial corridor, to pay for extra services there like sidewalk cleaning, security or holiday decorations. The added rate is small, but it's one reason two homes with the same value can have slightly different bills.

When clients want a quick number to budget with for a home in the city, I use about 2% of the purchase price a year for new construction and a little less for resales. The math backs that up: 10% times the 3.03 equalizer times the 6.85% rate comes out to just over 2% of market value before exemptions. Resales have tended to land a little under that because assessments have been running below sale prices, but a reassessment can close that gap. It's a number to budget with, not a prediction of the next bill, and it only works in the city. Most suburbs have much higher rates.

How the Assessor decides what your home is worth

Chicago gets reassessed every three years. Cook County is split into three regions, the city, the north suburbs and the south suburbs, and the Assessor does one of them each year. Chicago was last reassessed in 2024. The next one is 2027, and it will show up on the bills paid in 2028.

In a reassessment year you get a notice in the mail with the Assessor's new estimate of your home's value. In the two years in between, the value mostly stays put unless something changes, like a permit, a new building or a lot being divided.

So why does your bill still change every year? Because your value is only one input. The levies change every year. So do the tax rate and the state equalizer. Exemptions and appeals can change your taxable value in any year. The reassessment is the big swing, and the other two years are smaller ones.

Nobody from the county walks through your home. The Assessor values about 1.8 million properties with a statistical model built on recent sales and the details in its records: square footage, age, lot size, number of units, construction type. It's called mass appraisal. It does a reasonable job on a typical house on a typical block, and a worse job with anything that isn't typical:

• A gut rehab can be assessed like the old house until a permit, a sale or the next reassessment catches up with it.
• A house that needs everything can be assessed like its updated neighbors, because the model assumes average condition for the area.
• The county's records are sometimes just wrong: the wrong square footage, an extra bathroom, the wrong number of units. Checking yours on the Assessor's site takes about five minutes.

New construction

New construction is the one I always warn buyers about. The tax figure on a new-construction listing often reflects the vacant lot or a partial year, so it can be a fraction of what the finished home will pay once it's fully assessed. When the current bill clearly doesn't reflect the finished home, I have buyers budget around 2% of the purchase price a year as a starting point.

The same goes for any home where the bill on the listing doesn't match the house: a recent rehab, a seller with senior exemptions, or a seller who's been appealing for years. That bill reflects the seller's situation, not yours.

Condos

The Assessor doesn't value condo units one at a time. It values the whole building, using sales in that building and similar ones nearby, then splits the value among the units based on each unit's percentage of ownership in the condo declaration. That percentage is set when the building is built or converted, and it doesn't change when someone renovates. The Assessor doesn't even track a unit's square footage or bedroom count.

So a unit that was gutted last year and one with its original kitchen can carry nearly the same assessment if their percentages are close. The renovation matters to a buyer. It just doesn't show up in the assessment.

This is also why a lot of condo associations appeal for the whole building at once. Since the value is set at the building level, one appeal can cover every unit. It isn't required, though. Any owner can appeal their own unit.

Why some homes are assessed below what they sell for

Some neighborhoods simply have lower values, and every home is assessed at the same 10% of whatever the county thinks it's worth. The harder question is why the county's number and the actual sale price drift apart, and why they drift further in some neighborhoods than others. There are four main reasons.

Assessments run below sale prices in general. A University of Chicago study found the median Cook County home was assessed at about 82% of its sale price in the 2022–2024 cycle. Some of that is timing. Some of it was pandemic-era cuts that assumed prices would drop more than they did. A county value well under the list price doesn't mean anything is wrong with the house.

Cheaper homes used to be over-assessed compared with expensive ones. For years, Cook County assessed lower-priced homes closer to their real value, or above it, than it did expensive homes. Before 2019, the lowest-priced 5% of homes were assessed at a ratio 153% of the most expensive 5%. The same study found that gap down to 116%. That's within industry standards now, but it isn't zero. Over-assessed here means compared with other homes, not compared with the sale price. A cheaper home can be assessed below what it sold for and still be over-assessed if expensive homes are assessed even further below theirs.

Fast-rising neighborhoods fall behind, then catch up all at once. Between reassessments, a neighborhood where prices are climbing keeps paying on old values. When the reassessment comes, the whole gap closes in one bill. That's what happened in Chicago in 2024. Home values across the city ranged from a 7.7% drop to a 131.8% increase, and the biggest jumps were on the South and West sides, where prices had finally recovered from 2008. The median homeowner bill went up 133% in West Garfield Park, 99% in North Lawndale and 82% in Englewood.

Appeals move the burden around. Commercial owners appeal more often than homeowners and win bigger reductions, mostly at the Board of Review. Wealthier and majority-white areas appeal more than lower-income and majority-Black and Latino areas. Since the levy doesn't change, whatever one owner saves on appeal gets spread across everyone else.

The state equalizer

The equalizer, also called the multiplier, is a number the state applies to every Cook County assessment. People see it on their bill and assume it's a state tax increase. It isn't one.

Illinois law expects property to be taxed on about a third of its market value. Cook County assesses homes at 10%, so every year the Illinois Department of Revenue compares sale prices to assessments and sets a multiplier that brings the county as a whole up to that one-third. For tax year 2025 it was 3.0300, almost the same as 2024's 3.0355.

It doesn't change the total collected, because the Clerk sets the tax rate after the equalizer is applied. If the equalizer goes up, everyone's taxable value goes up by the same proportion and the rate comes down to collect the same levies. The one place it matters is exemptions. They're flat amounts, so a higher equalizer means they cover a slightly smaller share of your taxable value.

Exemptions

Exemptions are the part of the bill an owner has the most control over, and almost all of them belong to the owner, not the house.

The Senior Exemption and the Senior Freeze are two different things, and a senior can have both. The Senior Exemption is a flat $8,000 off taxable value for any owner-occupant 65 or older, with no income limit. The Senior Freeze is for seniors under an income limit. It locks your taxable value at the level it was when you qualified, so if your home's value keeps climbing, your taxes are calculated as if it hadn't. The rate and levies can still change, so the bill itself isn't completely frozen. The income limit has been $65,000. It goes to $75,000 for tax year 2026 (bills paid in 2027), $77,000 in 2028 and $79,000 in 2029.

There are also exemptions for owners with disabilities, veterans with disabilities, returning veterans, long-time owners whose values spiked, and home improvements, which keep part of a renovation's added value off the bill for a few years.

Timing matters when you buy

To get the Homeowner Exemption for a tax year, you have to own and live in the home as of January 1 of that year. I closed on my house on February 1, 2023, so my 2023 bill had no Homeowner Exemption even though I lived there most of the year. If you close any time after January 1, expect that first year's bill without it. The exception is new construction. If the home wasn't ready to live in until after January 1, the Assessor prorates the exemption from when it was.

When a home changes hands

The bill for the year you buy will usually still show the seller's exemptions, since they lived there on January 1. After that, they're gone. You apply for your own, and yours show up on a later bill. That can cut either way:

• A long-time senior owner can have a bill that's low for reasons that won't apply to you. A senior with the Homeowner and Senior exemptions is getting about $1,234 a year off the bill at today's rate, and more if they also have the Senior Freeze.
• A rental or investor-owned home won't have a Homeowner Exemption on the bill. If you're going to live there, your bill may come in lower than the seller's.

Before I give a buyer any tax estimate, I look at which exemptions are and aren't on the seller's bill. They're listed on the second-installment bill, and they change the number more often than people expect.

Where the money goes

More than half of a typical Chicago tax bill goes to Chicago Public Schools.

CPS's share includes a dedicated property tax for the Chicago Teachers' Pension Fund. The School Building & Improvement line is a separate City levy that pays CPS construction debt. Together, schools get about 58% of the bill. My two-flat's bill, which isn't in a TIF, breaks down almost the same way: 55.8% to CPS, 22.5% to the City and 4.4% to the parks.

The different bodies also have different limits. CPS can only raise its operating levy by inflation or 5% a year, whichever is lower, plus what new construction and expiring TIFs add. The City of Chicago is a home-rule government and has more room to raise taxes. The Water Reclamation District runs the sewage treatment plants and the Deep Tunnel, and the Forest Preserve District runs the county's forest preserves.

Your bill also has a column labeled "Pension." That isn't a separate tax. It shows how much of each body's share is going to its employee pension funds. On my two-flat's 2025 bill, about 29% of the whole bill went to pensions. For the City of Chicago's line alone, it was about 84%. For CPS, it was about 15%.

TIF districts

About 15% of all property taxes billed in Chicago, nearly $1.4 billion in tax year 2025, go to Tax Increment Financing districts instead of the City, CPS or the parks. There are 108 of them in the city. I had to read about TIFs more than once before they made sense to me, so I'll keep this as simple as I can.

When the City creates a TIF, it takes a snapshot of the total property value inside the boundary. Picture a line drawn at that value. For up to 23 years, CPS, the parks and every other taxing body keep collecting taxes on the value below the line, the same as before. Taxes on any value that grows above the line go into a separate fund instead. The City uses that fund for projects inside the district: streets, sewers, transit, and payments that cover part of a developer's costs. When a TIF has more money than it needs, the City can declare a surplus and send it back to CPS, the parks and the others.

Why are some homes in a TIF and others aren't? The City Council creates TIFs and draws their boundaries, usually around areas it wants to redevelop, and under state law the area has to qualify, typically by showing it's blighted or isn't developing on its own. Whether a house is in one comes down to which side of a map line it's on.

What are you paying for if you're in one? Your bill is calculated the same way as everyone else's, at the same rate. The main difference is where the money goes after you pay it, although TIFs also push that rate up a bit for the whole city, which I'll get to below.

My own house is in a TIF, and on my 2025 bill, 95.7% of the total is listed as going to it. CPS and the City show up as tiny line items. That doesn't mean I'm paying more than someone outside a TIF, or skipping out on schools. It means my block has gained so much value since the TIF was created that almost all my taxes now come from value above the line. In 2023, before the reassessment, the TIF's share was 73.7%.

TIFs affect people outside them too. CPS and the parks still levy what they need, but they can only spread it over the value that isn't captured by a TIF, which pushes the rate up for everyone. When a TIF expires, that value goes back into the general tax base. The three biggest Chicago TIFs each collected more than $100 million in 2025: LaSalle Street in the Loop, Kinzie west of the Kennedy, and the Red and Purple Line TIF that pays for the CTA rebuild.

Why your bill can go up when your value didn't

A bill goes up for one of two reasons. The total being collected went up, or your share of it did.

The total almost always goes up. Local governments in Cook County have asked for more property tax money every year for at least 32 years. For tax year 2025, the county total rose 3.9% to almost $19.9 billion, while inflation was 3.1%.

Your share goes up when other property loses value. In Chicago's 2024 reassessment, downtown office values dropped after years of high vacancy, and the Board of Review cut commercial assessments even more on appeal. Between that and higher levies, Chicago homeowners paid $469.4 million more that year, and the median homeowner bill went up 16.7% to $4,457. That was the city's biggest increase in at least 30 years, and plenty of those homes hadn't gained much value.

Tax year 2025 was quieter. The median Chicago homeowner bill rose 3.2% to $4,597. That was still faster than commercial bills, because commercial values kept dropping.

Two smaller things also push bills up.

The recapture law. When an owner wins an appeal after their taxes were already paid, they get a refund, and that refund comes out of money CPS, the parks and the other bodies already received. Since 2021, state law lets most of those bodies add the refunded amount to the next year's levy and collect it again from everyone. So part of every successful appeal ends up being paid, a year later, by the people who didn't appeal. CPS recaptured almost $72.4 million this way for tax year 2025.

Different caps. CPS's operating levy is capped at inflation or 5%, whichever is lower. The City is home rule and isn't held to that cap.

What the 2024 reassessment did to my own bills

Here's what happened to my house and my two-flat. I've left out the values and the bill totals.

My house's value went up 16% and its bill went up $32. Part of that is the Homeowner Exemption showing up for the first time, and part is the rate dropping as values rose across the city.

My two-flat's value went up 43%, a lot more than the city overall. The rate dropped for it too, but that barely helped, because its share of the total grew so much faster than everyone else's. Its bill went up $1,915.

The next year went the other way. My house's value didn't change, and its bill still went up $221, almost all from the rate going back up. The two-flat's value came down about 7% after I appealed it at the Board of Review, and its bill dropped $287.

My house's rate is also slightly higher than the general city rate because it's in a small mental health services district, the kind of add-on that makes two homes with the same value pay slightly different amounts.

Two installments, a year behind

Chicago property taxes are paid in two installments, both in the year after the tax year.

The first installment is an estimate: 55% of the previous year's total bill, due in the spring. For tax year 2025 it was due April 1, 2026. It doesn't reflect any change in your value, exemptions or rate.

The second installment is the real bill. It applies that year's assessment, equalizer, exemptions and rate, then subtracts what you already paid. Every change for the year lands on this one, which is why it's the bill people call me about.

The second installment due date moves around:

The last two were late because the county was overhauling its computer system. Late payments are charged 0.75% interest a month.

Taxes at closing

Because taxes are paid a year behind, a seller still owes taxes for the time they owned the home when they close, but those bills haven't come out yet. So the seller gives the buyer a credit at closing, and the buyer pays the bills when they arrive.

For years the standard was to credit 110% of the most recent full-year bill in the city and 105% in the suburbs, to cover expected increases. Once bills started swinging the way they have the last few years, that stopped working. Now we let the attorneys calculate the proration from the most recent bill and assessment information, using the formulas they each have.

Appealing your assessment

You can't appeal the tax rate or a district's levy. You can appeal the value the Assessor put on your property, and since appeals shift the burden onto whoever doesn't file, it's worth doing.

There are three steps:

1. The Assessor's Office. Every township gets a roughly 30-day window every year, not just in reassessment years.
2. The Board of Review. A separate elected board that also opens filing township by township every year. Most of the large reductions, especially commercial ones, happen here.
3. The Illinois Property Tax Appeal Board or circuit court. After the Board of Review, you can take it to the state Property Tax Appeal Board or file in circuit court, but not both.

A missing exemption is a separate fix. If you qualified and it isn't on your bill, the Assessor can correct it with a Certificate of Error, including for past years.

When I pull a seller's tax history, I regularly find owners who have clearly never appealed and are paying noticeably more than similar homes nearby. Most of them didn't know they could. Paying more than the neighbors doesn't prove a home is over-assessed, since exemptions and other details differ, but in my experience those homes are usually worth looking into. I wrote a separate post on why I appeal my own taxes every year and how to do it.

What this means if you're buying or selling

If you're buying

• Don't plan around the seller's bill. Look at which exemptions are and aren't on it, and whether the house matches what the county has on file.
• Budget for taxes to go up. Levies rise almost every year. Your purchase price doesn't reset the assessment, but it becomes one of the sales the Assessor uses at the next reassessment. For budgeting in the city, I use about 2% of the purchase price a year for new construction and a little less for resales.
• Know when the next reassessment is. Chicago's is 2027, on the bills paid in 2028. If prices in the neighborhood have run ahead of the assessments, plan for that bill, not this year's.
• Be careful with new construction and recent rehabs. The bill on the listing may reflect the vacant lot or the old house.
• Remember the January 1 rule. If you close after January 1, you won't have the Homeowner Exemption for that tax year.
• Count taxes as part of your monthly payment. A $1,200 difference in annual taxes is $100 a month, the same as a higher HOA. I wrote about how much a monthly cost like that matters in my condo red flags post.

If you're selling

• Buyers do the same math. A high tax bill raises their monthly payment the same way a higher price does, and they'll notice it when they compare your home to others.
• If your assessment looks high, appeal before you list. A lower bill is something a buyer can see.
• Make sure your exemptions are on your bill. You may be owed a refund.

Looking up your own numbers

Everything in this post is public:

• Cook County Assessor: your market value, the details on file, and which exemptions you're getting. You can search by address.
• Cook County Treasurer: your bills going back years, with the breakdown of where each dollar went.
• Cook County Clerk: tax rates and levies by district.

If your bill jumped and you want to know why, pull two years of second-installment bills and compare the market value, equalizer, rate and exemptions. One of those moved, and the bill will show you which.

FAQ

Why is my assessed value so much lower than what I paid?

Because the assessed value is 10% of the county's estimate of market value. A $450,000 home will show an assessed value around $45,000. The county's market value estimate is the number to compare to what you paid.

How do I estimate the property taxes on a Chicago home I'm buying?

In the city, I budget about 2% of the purchase price a year for new construction and a little less for resales. To check it against the actual assessment, take the county's market value for the home, multiply by 10%, then by the 3.03 equalizer, subtract $10,000 if you'll live there, and multiply by about 6.85%. For a $500,000 home that's roughly $9,700 a year.

Why did my bill go up when my home's value didn't change?

Usually because the levies went up, other property lost value, or both. Your bill is your share of what CPS, the City, the parks and the others asked for, so when commercial values drop or someone wins a big appeal, homeowners pick up the difference.

What's the difference between the Senior Exemption and the Senior Freeze?

The Senior Exemption takes $8,000 off the taxable value of any homeowner 65 or older. The Senior Freeze is for seniors under an income limit and locks their taxable value so rising home values don't raise it. A senior can have both.

How much of a Chicago property tax bill goes to schools?

A little over half. On a $300,000 home in tax year 2025, CPS got about 56% of the bill, plus about 2% more for school construction debt.

When is Chicago being reassessed next?

2027, on the bills paid in 2028. You don't have to wait for it to appeal. The Assessor and the Board of Review both open appeal windows for every township every year.

Do the seller's exemptions transfer to me?

No. Exemptions belong to the owner. You apply for your own after you move in, and you need to own and live in the home as of January 1 to get the Homeowner Exemption for that year.

Why is my renovated condo assessed the same as the original one down the hall?

Because the Assessor values the building, not your unit. Each unit gets a share of the building's value based on its percentage of ownership, and renovations don't change that percentage.

This article is general information, not legal or tax advice. Figures are from tax year 2025 and change every year.

Sources

• Cook County Treasurer's Office, 2025 Tax Year Bill Analysis, August 2026
• Cook County Treasurer's Office, tax bill due dates
• Chicago Park District, 2025 distribution of a Chicago tax bill
• Cook County Clerk, 2025 Tax Rate Report
• Illinois Department of Revenue, 2025 Cook County final equalization factor, June 2026
• Cook County Assessor's Office, Glossary, assessment calendar and how condos are reassessed
• Cook County Assessor's Office, Senior Freeze income limit increase, November 2025
• Cook County Assessor's Office, property tax exemptions brochure
• Hyde Park Herald, U. of C. study finds assessments fairer, September 2025
• Chicago Sun-Times, Black neighborhoods hit hardest with property tax bill increase, November 2025
• Axios Chicago, Residential property taxes to pay for Loop slump, November 2025
• Chicago Public Schools, FY2025 revenue