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›Tax Abatement FAQ's
Understanding your tax bill
District 41 operates under the Property Tax Extension Limitation Law, or the Tax Cap. This law slows the rate at which taxes rise by establishing a limit on the increase the district can receive from the previous year. This limit is 5% or the Consumer Price Index (CPI), whichever is lower.
The D41 portion of the tax bills residents received in May is in compliance with the Tax Cap legislation. The D41 portion shows a larger increase than normal because it is being compared with a lower than normal bill last year, when the district returned to taxpayers $2.7 million through an abatement. Residents paid less last year due to the abatement and are paying no more this year than they would have if there had been no abatement.
For the tax bills received in spring of 2013, District 41’s increase is 10.9%, not because it has exceeded the tax cap, but because last year, District 41 abated $2.7 million to taxpayers. The type of abatement the district elected to use (from the Bond and Interest Fund) did not decrease the base against which this year’s tax levy was calculated because that fund is levied separately. It did create a lower amount against which this year’s receipts are compared. If the district had not abated last year, the difference from last year’s levy would have been 3.65% rather than 10.9%.
How Taxes Are Calculated
In May of each year, residents receive their tax bills (payable in two installments: June and September). Information about tax bills for any property in the county is available at www.dupageco.org
The 1991 Property Tax Limitation Act limits any increase in property tax dollars to 5% or the CPI (Consumer Price Index), whichever is less. The overall impact of the tax cap has been to slow the rate at which taxes rise. New construction contributes additional dollars. Note that the cap limits the actual dollars received, not a percentage. The tax cap applies to the total dollars received by the district; taxes on individual properties may change by various percentages, depending on the value of their property.
The county clerk calculates taxes by applying a rate to each property value; the owner of a million dollar home pays the same rate as the owner of a $150,000 condominium, but the total dollars are more for the higher-value property.
After the county clerk calculates the capped amount of tax dollars the district may receive, new construction is factored in; the total amount becomes the base for the calculation the following year.
School districts must ask voters for permission before they can levy (request tax revenues) funds beyond what the tax cap allows; this is done by referendum.
The difference between the value of the existing structure and the value of the rebuild is exempt from the cap, minus any applicable exemptions. The taxes generated by the property value before alteration or rebuild is calculated under the cap. After one year, the dollars generated by the entire property come under the cap.
Equalized Assessed Valuation (EAV)
Your taxes are based on the EAV of your home (one-third fair market value). Increased EAV does not increase the dollars D41 receives beyond what the cap allows, but it does affect how much each property owner pays.
Appreciation does not increase the tax dollars coming to the district beyond what the tax cap allows.