At a River North Condo Closing, the Tax Credit Is a Guess About Next Year's Bill

The standard Chicago-area purchase contract settles property taxes in one blank. Paragraph 12 of the Multi-Board Residential Real Estate Contract 8.0 prorates general real estate taxes through the closing date using a percentage of "the most recent ascertainable full year tax bill," and the printed form leaves that percentage for the parties to fill in. The paragraph treats that proration as final at closing, with two exceptions: a property improved but not yet taxed for a full year as improved, and a separate written agreement between the parties.

That makes the number in the blank an estimate of a bill nobody has seen yet. In River North, that estimate depends on things specific to downtown: how the office towers did in their assessment appeals, how late the county's bills arrive, and the fact that city townships are reassessed again in 2027. The citywide tax headlines a buyer or seller has read this year point in a different direction from what happened on the Near North Side.

What the blank in paragraph 12 is pricing

Illinois property taxes are paid in arrears. The bills paid in 2026 cover the 2025 tax year. A seller who owned the condo for part of the year will never receive the bill for those months, so in the usual Cook County transaction the seller gives the buyer a credit at closing and the buyer pays the bill when it comes.

The percentage sets the size of that credit. A Chicago-area attorney guide to the 8.0 contract explains that 100% uses the prior bill as-is, while 105% assumes some increase. A September 2026 explainer from Chicagoland Property Law describes 105% to 110% as typical. It adds that in reassessment cycles, buyers worried about large jumps may ask for 115% to 120%.

To pick a sensible percentage, a buyer and seller have to estimate how one condo's share of the total tax burden will move. The Cook County Treasurer's Tax Year 2025 analysis sets out four steps that produce that share:

1. Local taxing bodies set the total levy.
2. The Assessor values each property.
3. The Clerk sets tax rates so that assessed values multiplied by rates raise the levy.
4. The Treasurer bills and collects.

The Treasurer also notes that an owner's share depends on how that property's assessment changes compared with other properties. Downtown, the other properties that matter most are the office buildings.

The Near North number the citywide headline hides

The 2024 city reassessment produced alarming headlines. The pattern on the Near North Side was different, and the Treasurer's own figures show it.

According to the Treasurer's Tax Year 2024 analysis, total taxes billed on homes rose in all but one of Chicago's 77 community areas that year. The Near North Side, which includes River North, was the one where total residential taxes fell. That is a total for the whole community area. It does not show what happened to any one unit's bill, and condos in the same building can move differently from one another.

For a proration, this matters because the neighborhood total moved in the opposite direction from the citywide homeowner increase. In Tax Year 2025, the bills paid this year, the citywide median homeowner bill rose 3.2%, a much smaller change. The Treasurer linked homeowners' slightly larger percentage increase to commercial and industrial values each falling by more than 2% while residential values fell 0.7%. So when commercial values fall faster than residential values, homeowners carry more of the levy.

Office appeals move the bill from the next block over

River North is part of the Treasurer's definition of the Central Business District, along with the Loop, the Magnificent Mile, the West Loop, the Far West Loop and Fulton Market. The Treasurer's report put office vacancy in that district at 28% in 2025. In the 2024 cycle, Loop commercial assessed value fell $379.2 million, or 7.2%, and Loop commercial tax bills dropped from more than $1.1 billion to $992.4 million.

Appeals pushed the shift further. In May 2025, the Cook County Assessor's Office reported that the Board of Review cut Chicago commercial assessed value by 17%, or $4.3 billion, and residential value by 1%. That raised homeowners' share of assessed value from 49% to 54%. North Chicago Township, which includes River North, had $1.1 billion in commercial reductions, or 19%.

So the main thing moving a River North condo's tax share is the assessed value of the office and commercial buildings around it. A condo owner can see all of that value on the public record and controls none of it. A proration percentage negotiated from the citywide homeowner average does not account for it.

When the bill shows up late, the credit sits in escrow

The county's tax-system overhaul has added a second unknown to the amount, which is when the bill will arrive, and it has done so for two years running.

In October 2025, The Real Deal, citing Crain's Chicago Business, reported that about 17,000 people who closed on Cook County homes after July 1 were waiting on tax money held by title companies. Those companies hold the seller's tax credit in escrow until the final bill arrives, then refund any overage after payment. The same report said title firms were collecting 1.5 to 2 times the prior year's second installment, which meant buyers were fronting more cash, even on homes well into seven figures. Kelli Fogarty of Advocus National Title Insurance told Crain's, as The Real Deal recounted, that "Nobody's being harmed, but they are being inconvenienced."

The 2026 schedule also slipped. WTTW reported that the first installment of Tax Year 2025 bills came due April 1, a month late. Second installments, which are normally released in early July and due in early August, ran about two months behind. The county set a September 1 mailing and an October 1, 2026 due date, and the bills were viewable online from August 18.

Chicagoland Property Law describes two tools used when bills run late. A post-closing reproration agreement requires the parties to settle up once the actual bill is published. A title escrow holdback keeps part of the credit back until then. Either one reopens a number the standard form treats as final at closing.

2027 is the year the estimate gets harder

For a River North closing this month, Tax Year 2025 is the most recent full-year bill, and it is now fully billed. Under the usual cycle, first installments are released in February and due in early March. The first installment equals 55% of the prior year's total bill.

The Cook County Assessor reassesses city townships every three years, most recently in 2024 and next in 2027. In the 2024 cycle, North Chicago Township residential notices were issued October 15 and the residential appeal deadline was November 27. Total assessed value in the township grew 30%. That 30% covers every property in the township and is not a figure for condos alone. In the same cycle, the Assessor's North Chicago residential table showed a 2023 median condo sale price of $330,000 and a 2024 estimated market value of $378,000.

A closing in 2027 prorates part of a reassessment year, and the bill for that year arrives in 2028. The most recent full bill on the table at that closing will come from before the new values. The 2024 cycle showed that the final burden in downtown townships also depends on later commercial appeals, which happen after the initial notices go out. Because of that timing, the gap between the proration a buyer can propose and the bill the buyer eventually pays is likely to be widest in 2027.

Questions we hear about this

Who gets the tax credit at a River North condo closing? In the usual Cook County transaction, the seller credits the buyer for the seller's share of the year through the closing date, and the buyer pays the bill when it arrives.

Is 105% written into the standard contract? No. The Multi-Board 8.0 form leaves the percentage blank. Figures like 100%, 105% or 110% are filled in by negotiation.

Does the 2024 Near North decrease mean River North bills will stay flat? No. The 1.8% decline was a total for the whole community area in Tax Year 2024. Citywide, the median homeowner bill rose 3.2% in Tax Year 2025.

This post is general information, not legal, tax or financial advice. Confirm the proration terms in your own contract with your real estate attorney.

If a River North closing is on your calendar for this winter or 2027, Hudson Parker can put your building's recent tax bills next to the proration terms you are about to sign, so your attorney starts with the numbers in hand. Request a Building-Specific Market Plan.