How new construction gets assessed, and the partial first year
A house completed mid-year is assessed for the part of the year it existed.
A newly built house is assessed differently in its first year, and new owners are frequently surprised by both the first bill and, more sharply, the second.
The partial first year
Property is assessed as at 1 January. A house completed in June did not exist on that date, so it is not assessed as a completed house for that year.
Illinois handles this by proration: the improvement is assessed from the date of completion or occupancy, for the portion of the year it existed. A house finished at the end of June carries roughly half a year of improvement assessment.
The land is assessed for the full year regardless. It existed on 1 January.
Why the second bill is so much larger
Three things happen at once, and each surprises people separately.
The proration ends. Year two carries twelve months of improvement assessment against year one's six.
The builder's exemptions were never yours. A homestead exemption does not transfer, and a builder never claimed one — so there is nothing to inherit and no exemption applies until you file.
The assessment may move toward your purchase price at the next reassessment.
What to do in year one
- Apply for the general homestead exemption immediately. Worth around $750 a year in Cook County, and nobody will do it for you.
- Check the property record against what was actually built. New construction is where floor areas, bathroom counts and basement finishes most often enter the record wrong, because they are entered from plans rather than from the finished building.
- Ask whether the proration was calculated correctly — from what date, and for how many months.
- Check whether you are in a special service area. Developers frequently finance subdivision infrastructure this way, and it is an annual levy for fifteen or twenty years that does not appear in the purchase price.
The home improvement exemption
Not for the original build, but relevant the moment you extend or finish anything. It shelters the added value for four years from completion, and it runs from a permitted completion date — so pull the permit.
Budgeting honestly
If you are buying new, do not budget from the first bill. Ask the builder or the county what a full year's assessment on a completed house of that size and class in that area looks like, add the composite rate, subtract the exemption you are about to apply for, and add any special service area levy.
That number is your actual annual cost. The first bill is not, and it is the one most people plan around.