Real Estate taxes in Cook County, Illinois are always a year behind. Thus, the real estate taxes Cook County property owners pay in 2015 are the 2014 taxes. Because real estate taxes constitute a lien against the real estate, it is customary for real estate taxes to be pro-rated as part of any real estate sale closing, based upon the most recent ascertainable taxes.
Cook County real estate taxes are billed in two installments. To make matters even more complicated, the Cook County Treasurer computes the first installment bill based upon 55% of the bill for the prior year. Thus, the first installment of 2015 taxes is billed based upon the 2014 taxes, with any difference between 2014 and 2015 actual taxes being billed in the second installment.
Because taxes have historically increased over time and Cook County tax billing lagging by a year, it is customary that real estate tax pro rations be based upon an escalation factor. Thus, purchase contracts frequently provide that the tax pro ration will be based upon 105%, 107% or even 110% of the most recent ascertainable taxes, to provide a cushion when the buyer must pay the actual tax bill for the year.
Feel free to contact an Illinois attorney experienced in handling all aspects of real estate closings for both buyers and sellers at Logan Law, LLC, if you have questions about the sale of your Chicago area real estate or any other area of the laws governing the purchase or sale of real estate.