It’s no secret that the COVID-19 pandemic has affected everyone, and local governments are no exception. Due to a lack of federal aid, Chicago, in particular, passed a property tax increase in order to close the revenue gap caused by the pandemic. This new tax reform includes an increase of $93.9 million for a total property tax levy of $1.6 billion. As many continue to struggle to pay their bills as it is, even the city government is anticipating a “surge” of people unable or unwilling to pay for these increases.
The city is understandably trying to mitigate the economic turmoil caused by the coronavirus pandemic. But in some respects, they’re trying to draw blood from a stone. Illinois citizens, particularly ones in Cook County, already are subjected to some of the highest tax rates in the country; and with so many people already struggling to keep their heads above water financially, it’s important for you to understand just how much it will impact you and your long-term financial health.
What is Included in the New Budget?
These cost increases go beyond just property taxes — so if you thought to yourself, “well I don’t own property in Cook County, so I won’t be affected”, you are unfortunately wrong. Included in the $12.8 billion budget proposal are also gas tax increases, ticket and fee hikes, and other new taxes such as cloud-based computer lease taxes. Additionally, more parking meters will be installed throughout the city as well as stricter enforcement of safety-related ticketing.
However, the property tax portion is what will hit Chicagoans the hardest. You can expect the following:
- $94 million property tax hike in total
- Residents with a median home value of $250,000 will be paying $56 more
- Property taxes are now scheduled to automatically increase every year based on the consumer price index
Note: Crain’s Chicago Business has provided an online calculator so you can see how much it will affect you.
What Does This Mean For Homeowners?
What this means for homeowners is that those already struggling to pay property taxes may find themselves completely unable to do so. This property tax hike seems to be out of desperation on the city’s part for two reasons: it’s almost always a hazardous political move to increase taxes (especially in an area that has a high tax rate as it is), and the fact that financial experts are anticipating citizen refusal:
“In a typical year, approximately 3% of property owners do not pay their taxes, according to Chicago officials. But in 2021, Chicago finance officials project that 10% of property owners won’t pay their tax bills, which would cost the city $65.2 million — accounting for approximately 4% of its projected deficit in 2021.”
But the fact remains — nobody knows just how the coronavirus pandemic will play out. Everybody hopes things will get better and normalize soon, but the reality is the economy could still worsen. If the year 2020 taught us anything, it’s that our expectations for the future can always be subverted by natural causes.
However, there are some avenues for property tax relief.
Get Property Tax Relief From SKYDAN Equity Partners
In these desperate times, it can feel like no one is willing to go up to bat for the little guy. More and more homeowners face foreclosure and often wind up selling their homes for way undervalue just to recoup losses.
Traditional avenues such as home loans or HELOCs can help in the short-term; however, they are extremely hard to access (especially these days with record unemployment) and serve only as temporary relief. Even if you manage to gain access to a new line of credit, high-interest rates ensure you’ll be taking on even more debt for the future, which in turn will negatively impact your credit score, thus limiting once again your access to quality loans.
SKYDAN Equity Partners’ home buyback program is designed to help struggling homeowners get out of financial binds. Our unique program allows you to sell your home and stay in it, letting you reap the benefits of a cash injection to pay off bills without having to be tossed to the curb or losing your beloved community.
Here’s how it works:
We buy your home for a fair price and in return give you a large sum of cash, with which you pay off existing debts (property taxes, credit card debt, medical bills, etc.). You then lease the home back from us for up to 24 months with deferred rent payments. This means that while you’re leasing your home back from us, there are no monthly payments, no interest paid, and no added debt.
At the end of the 24-month period, you have two options:
- Purchase the home back (original price + deferred rent)
OR - Sell the property, keeping all additional equity
We don’t care about your credit score, employment history or debt-to-income ratio. We are here to help you break the cycle of debt, not add to it as traditional home loans do. The only thing you need in order to qualify for our program is to have enough equity in your home. If you’ve been struggling to pay your Illinois property taxes, give us a call today for a consultation.
See If You Qualify!