A subject that is close to our pockets that deserves answers to some of the most commnly asked questions. We are here to talk about real estate taxes in Barrington IL, and other Barrington Villages which are located in Cook County, Lake County, Kane County and McHenry County. Because the Barrington IL zip code straddles all four counties, I won’t be going into the differences between each county. Here my goal is to answer your general Barrington IL real estate tax questions. The Villages are Barrington, Barrington Hills, Lake Barrington, North Barrington, South Barrington, Inverness, Deer Park, Tower Lakes.
Top Question – How Much Will My Real Estate Taxes Be On a Home I Buy in the Barrington Area.
Barrington real estate taxes are all going to be different amounts. Taxes on homes in Barrington are based on two things. The value of the property and the multiplier used to establish the taxes.
Home values went into decline in 2005 but the taxes did not. The tax office will re-value your home every three years based on comparable sales nearby. This caused a complete disconnect between home values and the value on your tax assessment. It gave rise to tax assessment appeals in the thousands. Many home values were adjusted. Now because we have not yet caught up, tax appeals are still in progress by many home owners. It’s important to know you cannot appeal your taxes whever you like. There are guidelines in each county about how and when you can appeal. That is not the subject of this post but it gives you a little insight.
Once a property is valued a multiplier is added and voila, your annual real estate taxes are known. One of the issues of the real estate decline was appeal values caused a drop in revenue. The only way to combat that was to increase the multiplier. The tax man still got his money to pay the schools, pensions, city servcies and so on. It may not be fair but while real estate values declined, service costs went up.
Every home ower gets an assessment of their home in the year preceding payment. It will look something like the blue letter on the right. You cannot view the contents of the letter, as it is my personal home and has personal information on it. But you get the idea, it is a letter with property identifier, tax assessment, value and other important information including information on when you can appeal and how to do that. The taxes will not be known until next year. The treasurer needs to establish his required budget and then work out what multiplier will be used.
Our bills in Lake County come out around April/May with payments dues June and September. Cook County bills work a little differently but as I said I am not here to explain all counties. As your Realtor if you buy in the Barrington area, I will of course explain the taxes on each property of interest to you.
So how do you find out what the taxes are on a Barrington Illinois home.
When a home is listed for sale, we publish the most recent tax bill amount on our detail sheet for a home. Althought it will always be a year old, it gives you a general idea. This information is publsihed on many of the sites you can search homes on, but it can take a little searching for. Here’s an example of the location of tax information on all the homes listed on this web site. When you click an address to get full details of a home it will look something like the image on the left.
The majority of you are most interested in the photos and price along with size, bedrooms, bathrooms, age and acreage. When a property really catches your eye you might scan the information below for more data but there is a lot of it. So to find taxes on each home for sale show here on this site, let me point you to where to look.
At the bottom of each listing sheet you’ll find tax information. It’s listed on our web site homes in alphabetical order. Lok at the image below and you’ll see I have arrows pointing to the taxes, tax year and any tax exemptions the current owner is receiving. This information is not guaranteed because it is provided by the listing agent. However it is easy to verify the information at each county web site which publishes all the information for every property.
Not all web sites are going to show the information, we prefer to show it all and to allow you access without having to sign up.
You might find some huge differences in taxes due and it can be very perplexing as to why. A local Barrington Realtor might be able to help you make sense of the values and real estate taxes of each property. We don’t have cookie cutter homes here and acreage also comes into play. Rely on us to help you out.
When are Real Estate Taxes Paid on Barrington IL Homes?
This is a top question from relocation buyers because it might be different than what you are used to back home. Real estate taxes here are paid one year in arear. So the assessment letter I have received is for the year 2015 but I will pay those taxes in 2016. Tax bills are due in two installments, usually around March through June and later in the year around September to November, this again depends on the county.
If you have a mortgage you may be paying your real estate taxes to your lender as part of your monthly payment. The lender will pay your bill when it’s due but it is your responsibility to make sure that is done. Usually both you and your lender will get a copy of the bill. Look on your mortgage statement to see if payment was made and then check the county records to make sure it paid your account!
How Are Real Estate Taxes Handled On Home Sales?
Top question number 3. This can be a confusing issue so lets look at a seller who sold a home this week. The owner is half way through paying the bill for 2014. However they lived in the home in 2014 so the bill is their’s to pay. At closing they must either pay the bill early, or provide the funds to the buyer to pay the bill on the due date.
Next 2015. The seller has also lived in the home until the closing date, therefore is responsible for paying the tax from January 1 2015 through the closing date. Sounds logical right? The only problem is we won’t get that bill until next year, so none of us know what it will be. The seller at closing must give you the money to pay that bill next year. It is acceptable practice here in Barrington to give you an extra 5% of the last known bill. So if the bill was $10,000 for the period January 1st throught closing date, then the seller agrees to give you $10,500. Your bill may end up being less, but it might be more. We cannot hold your closing open until the bill comes, so this is about as fair as possible.
As you will be living in the property for the rest of 2015, you’ll pay the remainder of that years bill.
Home sellers need to remember they have always paid their real estate taxes a year in arrear and while this is NOT a closing cost of selling, it is a deduction from your proceeds. All is well if you escrow your taxes with the lender, the funds should be available. Many of us do not do that, I choose to save mine and at least get a little return on my savings. At the end of the day it is due at closing to balance up the fairness of paying your taxes.
Buyers need also understand that the taxes are being given to you at closing to pay the bill. It’s not extra funds to go and buy new furniture. If you are getting a mortgage you may be required to put these funds in an escrow account with your lender, ready to pay the bill when it comes.
Transfer Taxes On Barrington Home Sales
Although not real estate taxes, it’s important to know that on the sale of real estate here in Illinois, there are yet more taxes to be paid and they are known as tranfer taxes. So how much are they and who pays them?
There are set rates for each state, county and sometimes village. The rate for the State of Illinois is .1%. (Or a dollar per thousand of value is an easy way to remember it.) Take a $700,000 home sale, the transfer tax due to be paid at closing, i.e. ownership transfer of the property is $700. County transfer tax is half of that at 0.05% or $350. (50 cents per thousand of value or half the state.) Total transfer tax due is $1,050.
Transfer tax is commonly paid in the Barrington area by the property seller. The only time this may be paid by the buyer or shared between both is for bank owned properties and every one of those is different. There are Villages in Illinois that have different amounts and customs as to who pays, but we are only talking about Barrington which does not charge a Village transfer tax.
Summary of Our Real Estate Taxes in Illinois and Barrington
Yes we do have high real estate taxes. A report on real estate taxes published a few days ago shows that Illinois has the second highest real estate taxes in the country, only exceeded to the top by New Jersey. That’s mind boggling. Our average rate is 2.32%, New Jersey is 2.38%. Hawaii is the lowest at 0.29% and for the lower 48 Alabama at .48%. There are many states at under 1% including California. Our Governor Bruce Rauner has introduced a bill to freeze real estate taxes in Illinois. It’s pending, not sure when it goes to final vote.
The startling fact is that here in Illinois it will take only 43 years to pay in taxes what your home is worth! It’s no wonder people say you need a second mortgae to pay your taxes!
The Barrington Illinois zip code of 60010 is well known to have high priced homes. Consider a median home of $600,000. Your taxes in general are going to be $14,280 a year or $1,190 a month!
Where’s the good news Corinne?
Well aside from a possible real estate tax freeze, and who knows when that will happen, Barrington is a super place to live! Just ask the 44,000 people who live here.
We’ll help you find your perfect Barrington area home, start your search, or let us know how we can help.