Tax Relief Exemptions

Tax Relief Provisions and Exemptions

 

General Homestead Exemption

This annual exemption is available for residential property that is occupied as the principal dwelling place by the owner or a lessee with an equitable interest in the property and an obligation to pay the property taxes on the leased property. The amount of exemption is the increase in the current year’s equalized assessed value (EAV), above the 1977 EAV, up to a maximum of $6,000.

 

Homestead Improvement Exemption

This exemption is limited to the fair cash value that was added to the homestead property by any new improvement, up to an annual maximum of $75,000. The exemption continues for four years from the date the improvement is completed and occupied. The Homestead Improvement Exemption may be granted automatically or Form PTAX-323, Application for Homestead Improvement Exemption may be required by the Supervisor of Assessments or County Assessor. In Cook County, an application must be filed with the County Assessor along with a valuation complaint.

 

Property Tax Extension Limitation Law 

The PTELL is designed to limit the increases in property tax extensions (total taxes billed) for non-home rule taxing districts. Increases in property tax extensions are limited to the lesser of 5 percent or the increase in the national Consumer Price Index (CPI) for the year preceding the levy year. The limitation can be increased for a taxing body with voter approval.

 

Although the law is commonly referred to as “tax caps,” use of this phrase can be misleading. The PTELL does not “cap” either individual property tax bills or individual property assessments. Instead, the PTELL allows a taxing district to receive a limited inflationary increase in tax extensions on existing property, plus an additional amount for new construction. Individual tax bills may still increase or decrease.

 

The limit slows the growth of revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation. As a whole, property owners have some protection from tax bills that increase only because the market value of their property is rising rapidly.

 

Payments for bonds issued without voter approval are subject to strict limitations.

 

If a taxing district determines that it needs more money than is allowed by the limitation, it can ask the voters to approve an increase. Taxing districts are allowed additional increases for

  1. New construction
  2. Annexations to the district
  3. Voter-approved increases in the limit itself
  4. Voter-approved increases in tax rates and voter-approved new rates
  5. The Tax Increment Financing (TIF) increment when the TIF district expires

 

Some extensions, by law, are not included in the aggregate extension. These extensions are not limited.

 

The collar counties (DuPage, Kane, Lake, McHenry, and Will) became subject to the PTELL for the 1991 levy year for taxes paid in 1992; Cook County was added for the 1994 levy year for taxes paid in 1995. In all other counties, a referendum can be held at the request of the county board which gives voters the opportunity to decide if the PTELL should apply to their counties. In addition, county boards of counties that are subject to the PTELL by referendum can give voters the opportunity to rescind the PTELL using the same referendum process. PTELL referenda are exempt from the requirement that taxing districts may have only three public questions on a ballot.

 

The CPI used is for all urban consumers for all items as published by the United States Department of Labor. In 2001, the limitation was 3.4 percent.

 

Senior Citizens Assessment Freeze Homestead Exemption

This exemption allows senior citizens who have a total household income of less than $55,000, and meet certain other qualifications to elect to maintain the equalized assessed value (EAV) of their homes at the base year EAV and prevent any increase in that value due to inflation. Qualified individuals must complete and file Form PTAX-340, Senior Citizens Assessment Freeze Homestead Exemption Application and Affidavit, each year with the Supervisor of Assessments or County Assessor. 

 

Senior Citizens Homestead Exemption

This exemption allows a $5,000 reduction in the EAV of the property that a person 65 years of age or older is obligated to pay taxes on, and owns and occupies, or leases and occupies as a residence. Generally, the initial application, Form PTAX-324, Application for Senior Citizens Homestead Exemption, must be filed with the chief county assessment officer (CCAO). 

 

Senior Citizens Real EstateTax Deferral Program

This program allows persons 65 years of age and older, who have a total household income of less than $55,000 and meet certain other qualifications, to defer all or part of the real estate taxes and special assessments on their principal residences. The deferral is similar to a loan against the property's market value. A lien is filed on the property in order to ensure repayment of the deferral. The state pays the property taxes and then recovers the money, plus 6 percent annual interest, when the property is sold or transferred. The deferral must be repaid within one year of the taxpayer’s death or 90 days after the property ceases to qualify for this program. The maximum amount that can be deferred, including interest and lien fees, is 80 percent of the taxpayer’s equity interest in the property. To apply for real estate tax deferrals, Forms PTAX-1017-TD, Application for Deferral of Real Estate Taxes, and PTAX-1018-TD, Real Estate Tax Deferral and Recovery Agreement, must be completed. To apply for special assessment deferrals, Forms PTAX-1017-SA, Application for Deferral of Special Assessments, and PTAX-1018-SA, Special Assessments Deferral and Recovery Agreement, must be completed. Contact your local County Treasurers Office to receive the necessary forms, or further information on the program.

 

Disabled Veterans Exemption

This exemption may be up to $70,000 of the assessed value for certain types of housing owned and used by a disabled veteran or his or her unmarried surviving spouse. The Illinois Department of Veterans’ Affairs determines the eligibility for this exemption, which must be reestablished annually.

 

 

Other Exemptions

Non-homestead Exemptions for Religious, Charitable, or Educational Organizations - Properties of religious, charitable, and educational organizations, as well as units of federal, state and local governments, are eligible for exemption from property taxes to the extent provided by law. The organization must apply for exemption to the county board of review which reviews the application and forwards it to the department for the final administrative decision.