What is in a name? Property tax. Real estate tax. Ad valorem (according to value) tax. All equate to the same name for the largest single tax in Illinois. Property tax is the major source of revenue for local governments. The largest share of the property tax dollar paid in Illinois goes to school districts. Generally speaking, everyone pays property taxes: • Homeowners and owners of commercial, industrial and agricultural property pay property tax directly. • Renters contribute to the property tax, but generally do so indirectly through their rent. Most landlords consider taxes a cost of doing business and adjust their rents to cover them.
There are current Illinois property tax exemptions for which an owner may or may not qualify. A brief description of these follow:
GENERAL HOMESTEAD EXEMPTION (GHE) (SB1790)
This annual exemption is available for “residential property that is occupied by its owner or owners as his or their principal dwelling place, or that is a leasehold interest on which a single family residence is situated, which is occupied as a residence by a person who has an ownership interest therein, legal or equitable or as a lessee, and on which the person is liable for the payment of property taxes.” (35 ILCS 200/15-175). The amount of the exemption is the increase in the current year’s equalized assessed value (EAV), above the 1977 EAV. In all counties in Illinois this equates to a maximum value of a $6,000 exemption (except Cook county which has a maximum of $10,000). The homestead exemption is many times automatically applied when a home is sold, but the new home owner should always check with their local County Assessor about a month to six weeks after closing to insure they are receiving this exemption.
HOMESTEAD EXEMPTION FOR PERSONS WITH DISABILITIES
This exemption is an annual $2,000 reduction in the EAV of the primary residence that is owned and occupied by a person with a disability who is liable for the payment of property taxes. The initial Form PTAX-343, along with the required proof of disability, must be filed with the Chief County Assessment Office of the county in which the home is located. The exemption must be renewed each year by filing Form PTAX-343-R, with the Chief County Assessor Office.
NOTE: The property cannot receive this exemption in the same year it is receiving the Veterans with Disabilities Exemption for Specially Adapted Housing or the Standard Homestead Exemption for Veterans with Disabilities.
VETERANS WITH DISABILITIES EXEMPTION FOR SPECIALLY-ADAPTED HOUSING
This exemption may be up to a $100,000 reduction on the assessed value for certain types of housing owned and used exclusively by a veteran with a disability in which federal funds have been used for the purchase or construction of specially adapted housing. The exemption is valid for as long as the veteran, the spouse, or the unmarried surviving spouse resides on the property.
STANDARD HOMESTEAD EXEMPTION FOR VETERANS WITH DISABILITIES
This exemption is an annual reduction in equalized assessed value (EAV) on the primary residence occupied by a qualified veteran with a disability. This veteran with a disability must own or be liable for payment of property taxes on a single-family residence. The property’s EAV must be less than $250,000 after subtracting any portion used for commercial purposes. The amount of the exemption depends on the percentage of the service-connected disability as certified by the United States Department of Veteran’s Affairs. Currently, a qualified veteran with a service-connected disability of at least 30% but less than 50% will receive a $2,500 reduction in EAV; if the veteran has a service-connected disability of 50% but less than 70%, the annual exemption is $5,000; and if the veteran has a service-connected disability of 70% or more, the residential property is exempt from taxation.
RETURNING VETERAN’S HOMESTEAD EXEMPTION
This exemption provides a $5,000 reduction in the EAV of a veteran’s principal residence upon returning from active duty in an armed conflict involving the armed forces of the United States. The exemption is for two consecutive tax years, the tax year that the veteran returns from active duty in an armed conflict involving the armed forces of the United States and the following year. The veteran must own and occupy the property as his or her principal residence on January 1 of each assessment year.
SENIOR CITIZENS ASSESSMENT FREEZE HOMESTEAD EXEMPTION
A person qualifies for this exemption if the person is: at least 65 years old; has a total household income of $65,000 or less; and meets certain other qualifications. Essentially the exemption freezes the senior citizen’s equalized assessed value the year that the senior citizen qualifies for the exemption.
SENIOR CITIZENS HOMESTEAD EXEMPTION
This annual exemption is available for property that is occupied as a residence by a person 65 years of age or older who is liable for paying real estate taxes on the property. The maximum amount of the reduction in EAV is $5,000 in all counties (except Cook County $8,000).
Finally, other less common exemptions not detailed here, but worth mentioning include: HOMESTEAD IMPROVEMENT; NATURAL DISASTER HOMESTEAD; PROPERTY TAX EXTENSION LIMITATION LAW (PTELL); SENIOR CITIZENS REAL ESTATE TAX DEFERRAL PROGRAM; NON-HOMESTEAD EXEMPTIONS FOR RELIGIOUS, CHARITABLE AND EDUCATION ORGANIZATIONS and LONG-TIME OCCUPANT HOMESTEAD (LOHE—COOK COUNTY ONLY).
It should be noted that tax law is ever evolving and some statements made here may not be applicable in your particular area or circumstance. If you think you might qualify for any of these exemptions, a call to your County Assessor office would be in order. That office can provide more details and how you would apply to receive these benefits.
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