The Homestead Act in Illinois

The state of Illinois offers 12 different types of homestead exemptions.

Homestead exemption laws provide property tax breaks to homeowners for their primary residence. All 50 states offer some sort of homestead exemption. In Illinois, homeowners have 12 different homestead exemptions to choose from, several of which went into effect in 2007.

General and Homestead Improvement Exemptions

Under the general homestead exemption the homeowner is eligible each year for a maximum $6,000 reduction in the equalized assessed value of her home. The equalized assessed value is the assessed value of all taxable real estate.

The homestead improvement exemption is based on the cash value that was added to the home by a new improvement or the difference in value between a prior structure and a rebuilt structure following a catastrophic event. The exemption of up to $75,000 annually is valid for four years from the year the improvements are made.

Exemptions for Veterans

Veterans returning home from active duty in an armed conflict involving U.S. forces are eligible for a $5,000 reduction in their equalized assessed value for the first and second tax years after their return. The veteran can qualify for the exemption again after returning from active duty during an armed conflict in the future.

Disabled veterans can choose one of two different annual exemptions. The disabled veterans' homestead exemption provides up to a $70,000 reduction in the equalized assessed value of a veteran's home. The amount of the disabled veterans' standard homestead exemption depends on the percentage of the service-connected disability that the veteran suffered.

Exemptions for Senior Citizens

The senior citizens homestead exemption, available to homeowners age 65 or older, reduces their equalized assessed value by $4,000. The senior citizens real estate tax deferral program is for those 65 or older who have a total household income below $50,000. The program allows those eligible to defer all or part of their real estate taxes and special assessments on their home. A maximum of 80 percent of the homeowner's equity interest can be deferred through the exemption.

Exemptions for Cook County Residents Only

Several Illinois homestead exemptions just apply to homeowners of Chicago and the surrounding suburbs of Cook County. The alternative general homestead exemption limits property value increases to 7 percent a year. This exemption, which became available in 2004 for a temporary period, was extended in 2010 for another three years. The longtime occupant homestead exemption is available for homeowners with a total household income or $100,000 or less. The home must be occupied for 10 years -- or five years if the homeowner received assistance buying the home from a government or nonprofit housing program.

References

• Rantoul Township High School: Equalized Assessed Valuation
• U.S. Legal Forms: Homestead Exemptions and Forms
• Illinois Department of Revenue: Property Tax Relief; Homestead Exemptions