It’s part of the American dream to own your own home. However, millions of people work hard to buy a home only to find that property taxes make affording it next to impossible.
Nearly every state has some form of property taxes. Unfortunately, Illinois effectively has the second-highest property tax rate in the country. The most recent data shows that Illinois homeowners pay real estate taxes that equate to 2.07% of the value of their homes. Fortunately, with a homestead exemption in Illinois, you may be able to avoid an unmanageable tax burden.
What Is a Homestead Exemption in Illinois?
Property taxes in Illinois are based on the assessed value of the property and how much revenue the local taxing districts need to operate the following year. The Illinois homestead exemption is, in essence, a discount applied to the equalized assessed value of your home, so your total tax is less.
In Illinois, the exemption amount changes by county. In Cook County, the homestead exemption lowers your property tax bill by taking $10,000 off the assessed value. On the other hand, in counties that border Cook County, the maximum is $8,000 for the basic annual exemption, while other counties only offer an exemption of $6,000.
Overview of the Homestead Tax Exemption in Illinois
It’s important to understand the property tax exemptions you can take advantage of. Essentially, anyone who owns a residential property that is their primary residence, such as a co-op, condo, or single-family home, is eligible to apply for a homestead exemption. It doesn’t apply to commercial or rental properties, although we can help with commercial tax appeals if you qualify.
Along with the basic homestead exemption, which lowers your home’s value by $10,000 in Cook County, there are additional exemptions you may qualify for to lower your home’s assessed value by even more.
Remember, these exemptions don’t actually decrease the value of your principal residence. They only deduct a portion of the assessed value, which is then multiplied by the state equalization factor to get the equalized assessed value (EAV).
Senior Citizens Homestead Exemption
If you're over 65 during the applicable tax year, you may also qualify for the senior citizen's homestead exemption. For example, to take the deduction on your 2025 taxes, you need to be 65 by December 31st, 2024, or earlier.
This exemption adds an extra $8,000 to your homestead exemption. So, rather than taking just $10,000 off the assessed value, your tax responsibility is based on the home's value minus $18,000. Thus, a primary residence with an assessed value of $400,000 will only be taxed at $382,000.
Disabled Persons’ Homestead Exemption
Anyone with a disability can also receive an extra exemption when approved. This adds another $2,000 to the deduction off your assessed value, giving you $12,000 total with the general homestead exemption. To qualify, you must be responsible for paying the property taxes, live in the property as your primary home, and be the owner of the home or have some type of legal interest in it.
Specialized Homestead Exemptions
Along with the above, there are some specialized homestead exemptions in Illinois for which you may qualify.
Low-Income Senior Citizens Assessment Freeze Homestead Exemption (SCAFHE)
If you're 65 on January 1st of the applicable year and have a household income of $65,000 or less, you may qualify for an assessment freeze. This means the property’s value is frozen at the current value. You’re protected from higher taxes as your property values increase. This is not an annual exemption, and you must apply each year.
Returning Veterans’ Homestead Exemption
Veterans returning from active duty in an armed conflict may also apply for an additional benefit. This is an additional $5,000 benefit that runs for two years only. You must own and live in your home on January 1 of each year you receive the exemption. It’s also available for two years every time you return from active duty.
Disabled Veterans’ Standard Homestead Exemption
If you have a service-connected disability from time served in the United States Armed Forces and are certified by the United States Department of Veterans Affairs, you may qualify for an additional exemption.
This number changes based on the level of your disability and also applies to surviving spouses if one spouse dies during their service. Although this exemption used to carry over annually, it’s now one you must reapply for each year unless you have been certified as 100% disabled.
Long-time Occupant Homestead Exemption (LOHE) for Cook County
Cook County offers a long-time occupant homestead exemption for those who've lived in their homes for many years. This helps to ease the cost of rising property taxes.
To qualify, the property must be your primary residence, and you must have lived there for at least 10 consecutive years. Applicants must also be under a regularly changing income threshold. This offer applies to townhouses, condominiums, and single-family homes.
Obtaining a Homestead Property Exemption in Illinois
If you live in Illinois and want to apply for the homestead exemption, remember that each county handles the process differently. Check your county assessor’s office website to get details specific to your home.
How Do I Apply for the Homestead Exemption in Illinois?
The first is proof of identity and occupancy from the previous tax year, such as a driver's license or an ID card. The Cook County's website has a list of additional documents you can use to qualify in this county, such as a passport, a City of Chicago ID card, or a passport. Your address on the proof of identity must match the address you’re applying for.
You also need proof of your property tax liability. If you’re on the deed filed with the county clerk’s office, you don’t need to bring additional proof. If you’re not listed on the deed, you can provide a trust agreement, stock certificate, or occupancy agreement.
The deadline for the Illinois homestead exemption application changes every year, but it is usually the last business day in April. If you’ve missed the opportunity to apply for the general exemption or special circumstances in the past, you can still file for them. If you qualify, you’ll receive a refund rather than an exemption.
When To Get Help With Your Homestead Exemption
While upcoming changes to the Illinois income tax code may bring some property tax relief by taxing those with an income greater than $1,000,000 three percent more, it’s also important that you minimize your tax liability with any exemption possible. The process can seem overwhelming, but fortunately, Ownwell is here for you.
We can help you save on your property taxes in three minutes or less, and the best part is that you don’t pay unless you save. We do both property tax appeals and can retroactively apply for missed homestead exemptions for up to two years.
There are no upfront costs, and the combination of proprietary software and local property tax consultants helps you save as much money as possible.
Visit our savings page today to discover homestead exemption and property tax appeal options!
