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The Cook County Assessor's Office (CCAO) and the Cook County Board of Review (BOR) have agreed to a unified capitalization rate and tax-rate calculation methodology, which requires the Assessor and the BOR to utilize a loaded capitalization rate when valuing commercial properties. This is a positive change for the Assessor since historically they wouldn’t accept a tax load even though it is the norm in ad valorem assessment calculations. Both the CCAO and the BOR now collaborate on setting specific “estimated” tax loads during the reassessment cycle rather than relying solely on historical data.
In standard appraisal practice, a tax load is determined based on the most recent available data for Equalization Factors and Tax Rates. Currently, the most recent historical data for Equalization Factors and Tax Rates are from the 2024 tax year. In the relatively near future, the 2025 Equalization Factors and Tax Rates will be published, and appraisers will then make their tax rate calculations based on the 2025 data. Where the CCAO and BOR differ from the above methodology is that they are “estimating” the tax load for 2026. We have no indication as to what these estimates are based on; however, they are presumably projecting future Equalization Factors and Tax Rates.
The CCAO has published Methodology Worksheets for the five triennial townships that have been assessed for 2026 to date. We have taken an example property from each of the townships to compare the CCAO/BOR estimated tax load and the tax load which is calculated from the most recently available historical data. For consistency we have selected five properties with 25% LOA and which the CCAO is valuing using an 8.50% base capitalization rate plus their estimated tax load. Our sample is presented below:
Tax | 2024 | Calculated | Assessor Estimated | Assessor | Calculated | Assessor Estimated | Value | |
Township | Code | Tax Rate | Tax Load | Tax Load | Base Cap | Loaded Cap | Loaded Cap | Difference |
Riverside | 34003 | 9.510% | 7.217% | 6.96% | 8.50% | 15.72% | 15.46% | 1.63% |
River Forest | 33012 | 9.381% | 7.119% | 6.84% | 8.50% | 15.62% | 15.34% | 1.79% |
Palos | 30017 | 10.030% | 7.612% | 7.61% | 8.50% | 16.11% | 16.11% | 0.01% |
Oak Park | 27001 | 11.205% | 8.503% | 8.15% | 8.50% | 17.00% | 16.65% | 2.08% |
Berwyn | 11001 | 10.725% | 8.139% | 7.86% | 8.50% | 16.64% | 16.36% | 1.68% |
With the Assessor and Board’s new methodology, the “estimated” tax load is slightly lower than historical data. A lower loaded capitalization rate would result in a slightly higher estimated value. In our five examples from Townships already released, the increased proposed market value ranged from 0.01% to 2.08% which is nominal. We are not sure we need to do anything different as attorneys or appraisers since we would continue to use the most recent available and verifiable data. The Assessor finally accepting a tax load as the proper way to appraise ad valorem property is a big deal. The estimated tax load they are planning to use, (rather than historical rates), doesn’t make much of a difference to value.
