DeKalb Co: Alleged Improper Real Estate Developer Preferential Assessments –

DeKalb Co., Ill. (ECWd) –

Sycamore, Illinois, where real estate tax preferential assessments are apparently being improperly applied to platted real estate developments after lots or entire developments are sold multiple times.

The “Developer’s Preferential Assessment” (“DPA”) is meant to encourage real estate development by providing tax incentive to protect the developer from paying increased taxes until they can realize a return on investment. The DPA is available in every county except Cook County.

There are certain criteria which must be met for certain properties to qualify for a DPA.

According to the Illinois Department of Revenue Publication 134, dated July 2021, or Section 10-30 of the Property Tax Code, the developer preferential assessment for a platted lot expires when among other things:

• a habitable structure on any lot is completed
• a lot is used for business, residential, or commercial purposes
• a platted lot or vacant platted lot is sold

The problem in certain Sycamore subdivisions is that lots have been sold multiple times, while apparently still having the DPA applied (no exemptions are listed for the current or previous years – but it shouldn’t show any because it is not an “exemption”) – and when a lot is developed, it appears to be undervalued for tax purposes.

There are 19 parcels in Heron Creek Country Estates (“HCCE”), 13 parcels in Camden Crossing, and 84 parcels in Reston Ponds similar to these examples, and most are not properly assessed:

Lot 117 – HCCE

• Parcel number 06-20-477-005 in DeKalb County Illinois was sold in 2011 for $172,500, sold in 2011 again for $90,000, and sold again in 2021 for $79,000.
• The sale(s) in 2011 should have removed the DPA and it should have been assessed at its fair market value, but tax records show it was not properly assessed until the tax year 2022, payable in 2023.
• In 2022 records indicate a home was built which included 6 bedrooms, 4,532 square foot total living area with a 2,933 square foot basement area.
• It was assessed for property tax purposes for the lot at $40,312 (1/3 value) – This property should have been assessed at its market value since the first sale. This home should have been properly assessed and prorated in 2022 and should be properly assessed in 2023 to include the value of the structure since the original developer is not who built the structure.

Lot 115 – HCCE

• Parcel number 06-20-477-003 in DeKalb County Illinois was sold in 2011 for $200,000 and sold again in 2018 for $100,000.
• The sale in 2011 should have removed the DPA and it should have been assessed at its fair market value, but tax records show it has not been properly assessed, even in tax year 2022, payable in 2023.
• It was assessed for property tax purposes at $3,199. This property should have been assessed at its market value since the first sale.

The issue here is that there are some vacant lots properly assessed (see 06-20-453-005), while others appear to be assessed at a much lower value than those in the same or similar subdivisions. It gives the appearance of those still under-assessed lots are using the DPA when it should have been removed after it was first sold. This creates a taxation scheme which is not uniform and places an undue burden on those taxpayers who are properly assessed.

Any DeKalb County taxpayer can file an objection with the Board of Review and ask these properties be properly assessed and taxed accordingly. We suggest someone take up the flag and file the objections.