Tax Candi

Happy First Day of Summer! In honor of Chicago's weather finally matching the season, let's take a look at one of the most interesting incentives Cook County offers.

The Cook County Assessor offers real property tax abatements to encourage new commercial construction projects. These abatements are subdivided into Class 7A (for projects with costs totalling under $2 million) and Class 7B (for projects with total development costs over $2 million).  Commercial property in Cook County is normally assessed at 25% of its market value, however projects receiving a Class 7 incentives will be assessed at reduced assessment levels.  Class 7 properties are assessed at 10% of fair market value for the first 10 years, 15% for the 11^th year, and 20% for the 12^th year.

For new construction or reoccupied abandoned property, the incentive will apply to the project in its entirety. Projects involving substantial rehabilitation of existing structures will only qualify for the added value which is attributable to the rehabilitation. The reduced assessment continues for 12 years from the date the new construction or substantial rehabilitation is completed or initially assessed.

The process to receive this incentive is rather involved--the property must be designated as an area in need of commercial redevelopment by the local municipal government, and the historical property taxes must demonstrate that the value of the property has decline or is not on par with the development of the surrounding area, among other requirements.   Cook County, ever the height of efficiency, subjects the application through numerous rounds of review.   However the property savings can be substantial for those projects which are awarded a Class 7 status.

If you're interested in this property tax abatement, be sure to check out the Class 7 bulletins.