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The average total property tax rate in Illinois during the 2018 tax year was 8.59%. That means 2018 property taxes on a home valued at $187,200 (the median in 2018, according to the Census Bureau) could have topped $16,000.
Fortunately, the Land of Lincoln provides multiple property tax exemptions that may help reduce the burden of property taxes for qualifying homeowners.
- What is a property tax exemption?
- Who’s eligible for a property tax exemption in Illinois?
- What Illinois property tax exemptions are available and what are they worth?
- How can I apply for an Illinois property tax exemption?
What is a property tax exemption?
A property tax exemption is a type of relief a state provides eligible homeowners to help them reduce the amount of property taxes they owe in a tax year.
When approving an exemption, state tax authorities generally exclude a portion of a home’s assessed value from being subject to property taxes. This lower assessed value is one factor that helps determine how much property tax someone owes. And that lower value might translate to a reduced property tax bill.Learn more about how exemptions and other property tax relief work
Who’s eligible for a property tax exemption in Illinois?
Illinois has quite a few exemptions, so if you own a house in the state, it’s worth checking to see if you might qualify for one.
Generally, you may be eligible for an Illinois property tax exemption if you own, occupy and pay taxes on your primary residence — and meet at least one of the state’s other qualifications. Exemptions are aimed at helping certain groups of Illinois homeowners who …
- Own or lease a house in the state, live in it as their principal residence and are responsible for paying taxes on the property
- Have a disability
- Are disabled veterans who have used federal funds to adapt their home to accommodate their disability
- Are disabled veterans who own or lease a home as their primary residence and are liable for paying property taxes on the home
- Improved a home or rebuilt one after a catastrophe
- Rebuilt a home after a widespread natural disaster
- Are veterans who have returned from a qualified armed conflict
- Are at least 65 and meet income and other qualifications
Each type of exemption has its own rules for who may be eligible to claim it. Be sure to check out the rules for an exemption before you apply for it.
What Illinois property tax exemptions are available and what are they worth?
It’s important to understand that the amount of an exemption reduces the equalized assessed value, or EAV, of a property. It’s not a dollar-for-dollar reduction in the amount of property tax you may owe. So, if a home that has an EAV of $200,000 and a tax bill of $3,000 is eligible for a $1,000 property tax exemption, that exemption will lower the EAV to $199,000. It won’t necessarily lower the tax bill by $1,000.
How much an exemption is worth will depend on multiple factors, including which exemption — if any — you qualify for, the assessed value of your home and the tax rates it’s subject to. And each exemption has specific rules for who can get the exemption and how it works.
Here are basic descriptions of some of the exemptions available in Illinois and what they could be worth.
Basic homestead exemptions
- The General Homestead Exemption amount is based on the difference between a home’s EAV in the current year and its 1977 EAV, up to a maximum exemption amount of $6,000 ($10,000 in Cook County). That means if your home’s EAV has increased more than $6,000 (or $10,000 in Cook County) since 1977, the maximum your EAV can be reduced will be $6,000 (or $10,000 in Cook County).
- Cook County homeowners who’ve lived in their home as their primary residence for at least 10 continuous years (five under certain circumstances), and whose total household income is $100,000 or less may be eligible for the Long-Time Occupant Homestead Exemption. The exemption limits a home’s year-to-year EAV increase to either 7% or 10%, depending on income. You can’t take this exemption and the General Homestead Exemption at the same time.
- New improvements or post-catastrophe rebuilding work that add value to a home may qualify the property for a Homestead Improvement Exemption. The exemption is worth up to an annual maximum of $75,000 — or $25,000 of the property’s assessed value — and is available for four years after the work is completed and occupied.
Exemptions for disabilities and disasters
Homeowners with disabilities may qualify for a $2,000 annual reduction in their home’s EAV. Disabled persons must file an exemption claim form (Form PTAX-343-R) annually and provide proof of their disability in order to qualify. This person would also need to be liable for the payment of property taxes in order to qualify for this reduction.
And homeowners who’ve rebuilt homes affected by a widespread natural disaster may get an exemption. The amount of the exemption is based on both the home’s reduced EAV in the first tax year the homeowner applies for the exemption and the home’s EAV in the tax year before the disaster happened.Is disability income taxable?
Exemptions for veterans
Illinois offers three different exemptions for veterans.
- The Standard Homestead Exemption for Veterans with Disabilities is for qualifying veterans certified as disabled by the U.S. Department of Veterans Affairs. The amount of the exemption depends on degree of disability and ranges from $5,000 to total exemption.
- The Veterans with Disabilities Exemption for Specially Adapted Housing can be worth up to a $100,000 reduction in assessed value if a disabled veteran uses federal funds to buy or build a specially adapted house. The exemption can also apply if a charitable organization donates the home or the adaptations to a qualifying disabled veteran.
- Veterans returning from active duty in an armed conflict may have their home’s EAV trimmed by $5,000 per year for two consecutive tax years.
Exemptions for seniors
- The Senior Citizens Homestead Exemption provides homeowners who are 65 or older with an EAV reduction of $8,000 in Cook County and $5,000 in all other counties.
- Homeowners who are 65 or older with total household income of $65,000 or less, and who meet other qualifications, may be eligible for the Senior Citizens Assessment Freeze Homestead Exemption. The year a senior qualifies for this exemption, their home’s assessed value is frozen and will not increase as long as the homeowner continues to qualify for the exemption.
Keep in mind that you may not be able to get more than one exemption on the same property, even if you technically qualify for multiple exemptions. For example, disabled veterans who qualify for a Veterans with Disabilities Exemption can’t take the exemption for specially adapted housing in the same tax year.Do you have to pay taxes on Social Security income?
How can I apply for an Illinois property tax exemption?
Although Illinois state law creates property tax exemptions, you apply for exemptions through your county assessor’s office. So, visiting your county assessor’s website is a good first step in learning how to apply for an exemption.
You may be able to apply for exemptions online in some counties through the county assessor’s website. In others, you may have to mail an exemption application form. Generally, you can either download application forms from the county assessor’s website or call the assessor’s office to ask them to mail you a form.
Some exemptions require you to apply every year, while others renew automatically. And you’ll generally need to apply by a specific deadline for each tax year, which can vary from county to county.
Property tax exemptions are intended to help reduce the burden of real estate taxes for homeowners. And if you qualify for one, it could help reduce the amount of property tax you must pay. In Illinois, multiple exemptions are available, so you could qualify for some property tax relief if you own a home in the state, live in it as your primary residence and pay property taxes for it.
Relevant sources: Illinois Department of Revenue: Property Tax Relief – Homestead Exemptions | Illinois Department of Revenue: Property Tax Statistics by Year | U.S. Census Bureau | Cook County Assessor’s Office: Homeowner Exemption | Illinois Department of Revenue: The Illinois Property Tax System | Kane County Assessment Office: Homestead Exemptions | LaSalle County Assessment Office | Mercer County Department of Assessments
Jennifer Samuel, senior tax product specialist for Credit Karma Tax®, has more than a decade of experience in the tax preparation industry, including work as a tax analyst and tax preparation professional. She holds a bachelor’s degree in accounting from Saint Leo University. You can find her on LinkedIn.