August 06, 2025
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Click here for an infographic on the Property Tax Extension Process
Click here for an infographic on Property Tax Bill Calculation
EXECUTIVE SUMMARY
This report explains the system and method for how property taxes are levied, calculated and collected in Cook County, Illinois. This is called the tax extension and billing process. Additional Civic Federation primers will explain the Cook County assessment, property tax appeals and tax increment financing (TIF) systems.
The purpose of this report is to make the property tax system more transparent and understandable for policymakers, homeowners, renters, business owners, and residents across Cook County. A summary of the report’s key points follows.
Who Receives Property Taxes?
Cook County has nearly 500 local governments, or taxing bodies (municipalities, counties, townships, park districts, library districts, park districts and other local governments) that each receive property taxes to pay for public services. The Cook County Treasurer’s Offices collects property tax revenues and distributes them to the various taxing bodies throughout the county.
How Property Value is Calculated
To determine how much to bill to taxpayers, the taxable value of each property, the Equalized Assessed Value (EAV), must be determined. First the Cook County Assessor estimates the property’s market value. In Cook County, residential properties are valued at 10% of market value while commercial and industrial properties are valued at 25% of market value. This is known as the Assessed Value. The Cook County Clerk then multiplies the Assessed Value by a state equalization factor to ensure the total assessed value is consistent across the state at 33 1/3% of fair market value. Exemptions such as homeowner or senior exemptions are then deducted, resulting in the final adjusted EAV.
How Tax Rates Are Set
Each local government budgets how much money it requests from property taxes. This is called a levy. State laws limit how much most governments can actually collect by applying rate limits (which limit specific tax rates of certain funds) and PTELL tax caps (which limit how much total revenue can grow each year for each government). Home rule governments like the City of Chicago are exempt from PTELL tax caps. After rate limits and PTELL tax caps are applied, the Cook County Clerk determines the final, legally authorized amount of property tax revenue each taxing body is allowed to receive. This is called the extension. The Cook County Clerk computes tax rates by dividing the extension by the Equalized Assessed Value of property. The final rate applied to each property is a “composite” or total rate that adds all of the rates for each government levying property taxes on that property.
How Tax Bills Are Calculated
The composite tax rate calculated by the Cook County Clerk is applied to the value of individual properties to determine individual tax bills.
How Much Revenue Does a Government Receive?
After rate limits and PTELL tax caps are applied, the Cook County Clerk determines the final, legally authorized amount of property tax revenue each taxing body is allowed to receive. This is called the extension. It can be equal to or less than the levy request, depending on those limits. For home rule governments like the City of Chicago the levy is the same as the extension.
What are Home Rule and Non Home Rule Governments?
Home rule governments like the City of Chicago have broad powers under the Illinois Constitution to govern themselves. They can raise taxes, borrow money, and regulate local issues without needing state approval. They are not subject to property tax limitations, such as PTELL tax caps or rate limits. Most governments, such as school districts or park districts, are non-home rule governments. They can only do what the state specifically says they can do. They are subject to PTELL tax caps and fund rate limits regarding how much they can raise in property taxes.
What is a Tax Increment Financing (TIF) District?
An economic development tool intended to generate economic development activity that would not have occurred “but for” the incentives offered. TIF works by establishing a specifically defined district, using incremental growth in revenues over a frozen baseline amount to pay for redevelopment costs.
How You Get Your Tax Bill
Cook County property owners pay taxes to a number of governments in a single tax bill (billed in two installments as detailed below) that is sent to them by the County Treasurer. The Treasurer also collects the tax payments and distributes these collections to the taxing districts. The property tax bills are sent in two parts:
- First Installment is 55% of last year’s bill, due in March.
- Second Installment (usually due in summer) is based on the current year’s rates and values.
Many other counties issue a single, two-coupon bill to taxpayers in a single mailing.
What Happens if You Don’t Pay Your Property Taxes?
Unpaid taxes may be sold to investors in a tax sale, which can lead to losing your property if not repaid. A separate scavenger sale is held for long-overdue taxes. Tax and scavenger sales are conducted by the County Treasurer.
Where Do Your Property Taxes Go?
Most of your property tax dollars in Illinois – 50% or more - go to public schools. The rest is divided among municipalities, counties, townships, park districts, library districts, park districts, and other local governments.
What is an “Effective Tax Rate”?
This is a helpful way to compare tax burdens across areas. It shows what percentage of your home or business’s market value goes to taxes. For example, a $6,000 property tax bill for a home valued at $300,000 generates a 2% effective tax rate ($6,000/$300,000 = 2%).
STRUCTURE OF THE REPORT
The report is divided into four sections:
1. A description of the different kinds of units of government in Cook County that impose taxes, the so-called taxing districts.
2. A summary of the property tax extension process that determines how much revenue each taxing district receives. It includes discussions of:
- How is the taxable value of property computed?
- How do rate limits and PTELL tax caps limit property tax levies?
- How are tax rates calculated?
- How are final property tax extensions computed?
3. A description of the property tax billing process, including:
- How are property tax bills calculated?
- What happens if you fail to pay your property taxes?
- How are property tax revenues distributed to taxing districts?
4. A discussion of effective property tax rates, which shows what percentage of a property’s market value goes to taxes.
To read previous Civic Federation Property Tax Primers, published 2009-2011, visit civicfed.org/civic-federation/propertytaxprimers2009-2011