How a Property Tax Bill is Calculated
Your assessment is one part of the property tax process. This page walks through the process and shows you which parts our office is responsible for.
How a Value Becomes a Tax Bill
Four steps, and our office is only responsible for the first two. Knowing which step you disagree with tells you who you need to contact.
Fair market value
We analyze what your property would sell for on the open market, using recent sales of comparable properties.
Assessed value
Illinois law sets the level of assessment at one-third of fair market value, and it also mandates uniformity of assessment among comparable properties. We assess all properties in compliance with these statutory requirements throughout the Township.
Equalization factor
Every year, in accordance with State law, DuPage County determines an Equalization Factor for each township's assessments. The County derives this Equalization Factor based on a three-year weighed average of sales for each township, then applies it to that township's assessments.
Tax rate and bill
Schools, municipalities and other taxing bodies set their tax levies. The County Clerk then calculates tax rates and individual tax bills The County Treasurer sends the tax bill, then collects your payment.
The Formula
Nine lines, in order. Each one takes the result of the line above it. This office is responsible for the first three only.
Our office sets the assessed value, not the tax rate.
We are responsible for the first three lines only. Everything below them is set elsewhere.
What each term means
The same five terms appear on your assessment notice and your tax bill:
Fair Market Value
We review every sale in your neighborhood and compare your property against similar ones that have sold, adjusting for physical and locational differences. Fair market value is neither the highest nor lowest price a property could sell for; rather, it is the most probable one.
Level of Assessment
Illinois law requires the Township Assessor to assess property at one-third of fair market value. Your property's assessment should equal one-third of your property's fair market value.
County Equalization Factor
Every year, in accordance with State law, DuPage County determines an Equalization Factor for each township's assessments. The County derives this annual Equalization Factor based on a three-year weighed average of sales for each township, then applies it to that township's assessments.
Exemptions
Property Tax Exemptions are set by State statute. Exemptions are deducted from the equalized assessed value of your property. The value after exemptions are subtracted is the billing value. Your local tax rate is then applied to the billing value to determine your property tax bill.
Local tax rate
Schools, municipalities, and other taxing bodies set their tax levies each year. The County Clerk then calculates tax rates for each tax district based on the tax levies of the taxing bodies that provide services to your area.
Who decides what you pay
Property taxes are driven by what local governments spend, not by the assessment that our office places on your home.
Two homeowners with the same assessment can pay very different property tax bill amounts, depending entirely on the tax rates for their areas.
Local governments use property tax revenue to pay for the services they provide in their district. Each one sets its own budget, converts this number into a tax levy, and turns their tax levy over to the County Clerk. The County Clerk then converts the taxing bodies' tax levies into the overall Tax Rate for each tax district.
If total spending by local governments serving your area rises, then your property tax bill rises, even if your assessments did not change.
Tax caps
The Property Tax Limitation Act of 1991 Limits the Increase in Taxing Bodie's Tax Levies
A cap on the tax levy increase, NOT on the tax bill.
If a referendum passes, taxes in that district can rise by more than 5 per cent. The cap limits what a district may take without asking voters first.
Assessed valuation x tax rate = taxes. The assessor determines the assessed valuation of every property in a taxing district. That is only half of the process. The other half is the budgeting and spending of the local taxing bodies.
Before tax caps, if assessed valuation rose 10 per cent because the market rose, a taxing district could ask for and receive 10 per cent more revenue. Large tax increases were driven by inflation in property values as well as by budget increases.
Since 1991, overall tax increases have been limited to 5 per cent or the Consumer Price Index, whichever is less, each year. Even where assessed valuation rises by more than 5 per cent, a district can only receive 5 per cent more than the previous year, and tax rates are forced down automatically.
Tax caps were never intended to reduce property taxes or freeze them. They allow reasonable increases for taxing districts while protecting owners from steep annual rises. A district that needs more than 5 per cent can ask voters for it by referendum.