How are farm properties valued in Illinois?

Farms in Illinois are not assessed according to traditional market value but according to “agricultural economic value,” which is defined by law. This value is based on statewide studies of soil capability and of the net income generated from farmland in Illinois. Each soil type in the state is rated by the University of Illinois - College of Agriculture according to its capability of producing crops. This rating is known as the “soil productivity index.” A State Farmland Technical Advisory Board certifies to the Department of Revenue a five-year average net income for each of these soil ratings. The agricultural economic value for each index is then calculated by dividing the net income by the average of the Federal Land Bank mortgage rate for the same five years. These values are certified to each county by the Department of Revenue by May 1st of the year before they are to be used in assessing. In each county, a Farmland Assessment Review Committee, consisting of local officials and farmers, advises the Chief County Assessing Officer regarding the interpretation and application of the values certified. This committee may propose alternate recommendations to the Department if it disagrees with the values certified. The State Property Tax Appeal Board makes the final decision if there is any disagreement as to the appropriate values and procedures to be used in a county.

To assess an individual farm, an assessor finds the soil productivity index rating for the farm’s crop land and assesses this acreage at one-third of the agricultural economic value certified for these ratings. Permanent pasture is assessed at one-third of the value that would be assigned to it if it were cropland, and “other farmland” (e.g. forest land, grass waterways) at one-sixth of cropland. Wasteland has no assessed value unless it contributes to the productivity of the farm.

Farm buildings are assessed at one-third of the value they contribute to the productivity of the farm. Farm home site and dwelling assessments are based on market value.

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1. What is property tax?
2. What is the history of the Illinois property tax?
3. What is considered property?
4. How is the value of property determined?
5. How are farm properties valued in Illinois?
6. Who must pay property taxes?
7. Who spends property taxes?
8. How important is the property tax compared to other taxes?