Homestead exemptions help seniors reduce their tax bills each year. Understanding these exemptions and the criteria for qualification is well worth taking the time to investigate. The more homeowners know about the exemptions they may be eligible to claim, the more of their hard-earned money they can keep in the bank. There are multiple options available in Illinois, but it is not possible to claim them all, so individuals will want to meet with their accountant and tax attorney to determine which is most advantageous to them. While these exemptions are relatively static, it is important to research and review the eligibility requirements and filing requirements each year to stay on top of any regulatory changes that may have occurred since the individual last applied for the exemption.
The General Homestead Exemption
This annual exemption applies to residential property owners, leasehold interests, and those liable for paying property taxes on the property. Eligible individuals can claim a maximum exemption of $10,000 in Cook County, and up to $6,000 in other Illinois counties.
Senior Citizens Assessment Freeze Homestead Exemption
To qualify for the Senior Citizens Assessment Freeze Homestead Exemption, applicants must be at least 65 years old and have a household income less than $65,000. This exemption freezes the EAV at the first year of the individual’s eligibility. Individuals are required to file PTAX-340 every year with the Chief County Assessment Office in order to continue receiving the exemption.
Senior Citizens Real Estate Tax Deferral Program
Applicants who are 65 years of age or older can defer all, or a portion of their real estate taxes and special assessments up to a maximum of $5,000 if the deferral is claimed on a primary residence. The state will then pay the property taxes and file a lien against the property. The state will also assess a 6% annual interest until the debt is satisfied or until the property is sold or transferred, at which time the responsible party will be required to satisfy the lien within one year of the taxpayer’s death, or within 90 days following the individual’s loss of eligibility for the program. It’s important to note that the maximum amount that can be deferred is 80% of the taxpayer’s equity interest in the residence.
Long-Time Occupant Homestead Exemption
Since 2007, residential property owners living within a primary residence with a total household income of less than $100,000 may qualify for the Long-Time Occupant Homestead Exemption.
This exemption requires living within the property for 10 continuous years, or 5 continuous years in situations where the individual receives assistance to purchase the property through a government or other non-profit housing program in Illinois. The exemption limits EAV increases based on income. It’s important to note that individuals cannot receive both the General Homestead Exemption or Senior Citizens Assessment Freeze Homestead Exemption.
Homestead Exemption for Individuals with Disabilities
This allows individuals to receive an annual reduction of $2,000 in the EAV of their primary residence in Illinois. To claim this exemption, individuals must file PTAX-343 and provide evidence establishing their disability. This exemption is renewable year after year, however, individuals cannot claim this exemption at the same time they claim a Veterans with Disabilities Exemption or Standard Homestead Exemption for Veterans with Disabilities.
These property tax exemptions on primary residences are invaluable tools that seniors can use to reduce their long-term tax liabilities in Illinois. However, it is crucial to understand which exemptions they qualify for, and which programs can, and cannot, be claimed simultaneously. Attempting to claim the wrong exemptions can be a costly mistake that individuals can avoid by consulting with their accountant and attorney. Crucially, individuals must remember when they must apply and reapply for each in order to maintain their eligibility.
