- The Chicago city council voted 35-15 in favor a $543 million property tax hike as a part of Emanuel's $7.8 billion fiscal 2016 budget
- North side homeowners and homebuyers may be the most significantly impacted based on tax assessments
- Low income renters may also face a harsh increase in home costs
Mayor Rahm Emanuel proposed a $543 million property tax hike last month that would impact Chicago’s residents over the course of the next four years. On October 28, the city council voted 35-15 in favor of the hike as a part of Emanuel’s $7.8 billion 2016 fiscal budget.
The record-breaking property tax increase was said to be a last-ditch effort to pick the city up out of the mud and keep its residents safe.
Starting January 1 and going until 2018, property taxes will increase for residents to cover state-mandated increases to pensions for police officers and firefighters. The news isn’t the brightest for Chicago’s residents, and even the politicians voting in favor of the increase did so with a must-do attitude.
The city has been rated low on the totem poll by investment agencies like Moody’s Investments Services and Fitch Ratings, but the tax hike is expected to help pull the city back into a positive light.
According to a Chicago Tribune calculation, a residential property priced at $250,000 could see a tax hike of $6,109.44 over the next four years.
But not all Chicago residents will be treated equally. The tax hike is dependent on the neighborhood, and North Siders will have a bigger shift upward in their taxes. Some South Side residents may even see a dip in their property taxes.
Based on the 2014 tax assessor’s estimated market value, a property marked as below $250,000 would not experience a tax increase if the tax hike passes through the state’s legislation. Any property above that market will be subject to an uptick in property taxes.
One group that may be hit hard is the city’s low-income residents.
“Most multifamily properties are considered commercial properties for real estate tax purposes, so whether they are in a low income area or a higher income area, they would see a tax increase,” said Marc Rutzen, KIG Analytics’ chief data officer, in an emailed statement.
“This could actually be more detrimental to low income renters than their landlords, as the impact of the additional tax bill would be passed on to renters in the form of higher rents or lower maintenance budgets.”