A wide assortment of property-tax-saving exemptions for the 2021 tax year will help, and are now available online in a new, streamlined application.
30-May-22 – Imagine the current property tax fright of a senior citizen who has owned and resided in his North Side three-flat for decades.
In March 2022, the owner paid a first-installation bill of $13,932. That represents 55 percent of the property’s $25,331 total 2020 real estate tax.
Ironically, the elderly owner’s tax bill is almost as much as his total 2021 Social Security earnings of $27,576. And the tax bite has grown steadily over past decades. In 2010, the owner paid a tax bill of $17,657, up from $12,059 in 2001.
What’s worse, the second installation of the owner’s 2021 tax bill, due around August 1, is expected to be much higher following last year’s 38 percent reassessment increase. How is the owner – with a total net household income of $40,636 – expected to pay a whopping tax increase? Taxes currently are 60 percent of his net income.
A study by the Illinois Policy Institute, a nonpartisan research organization, found that Chicago property taxes rose on average 92.3 percent between 2010 and 2020.
Cook County Assessor Fritz Kaegi estimated that the fair market value on the senior owner’s three-flat rose 38 percent to $1,570,000 from $1,137,100 in 2020. The assessed value jumped to $157,001 from $113,710.
Two years ago, Mayor Lori Lightfoot oversaw passage of a new city ordinance that promises beleaguered property owners a ticking time bomb – guaranteed annual real estate tax increases of up to five percent.
One of several Chicago and Cook County tax lifesavers available to the elderly owner is the Long-Time Homeowner Exemption.
However, only two percent of homeowners – about 11,000 of more than 1.5 million owners – in Cook County qualify for this exemption.
The long-time exemption provides homeowners with an expanded homeowner exemption with no maximum exemption amount. In addition to meeting income and residency requirements, applicants for the long-time must also have a significant assessment increase that exceeds the maximum amounts set by the state legislature. Applications for this exemption must be filed annually.
This writer respectfully suggests that Assessor Kaegi consider expanding this long-time exemption to retired, low-income, “ma-and-pa” small apartment owners.
For example, to qualify for this writer’s proposed “Longtime Small Apartment Exemption,” an owner of a two-flat, three-flat, or four-flat must have resided in the property as a primary residence for 20 years or more and have an annual income of $50,000 or less.
The owner also must have experienced an excessive double-digit assessment increase in the recent reassessment to qualify for the proposed new exemption.
This proposed exemption also should be coupled with the Senior Citizen Exemption and the Senior Tax Freeze. It is likely these exemptions would prevent hundreds of longtime ma-and-pa apartment building owners from being displaced from gentrifying neighborhoods where they have resided for most of their lives.
Assessor Kaegi, who is up for reelection, has been targeted and criticized by big commercial property owners and apartment developers for refocusing assessment efforts on them – and away from homeowners, who have been carrying the majority of the tax burden for decades.
Kaegi’s creative TV ads show his face covered with darts on a target board (right).
“It’s a face to corporate landlords love to hate,” Kaegi said.
The Assessor recently announced that a wide assortment of property-tax-saving exemptions for the 2021 tax year are now available online in a new, streamlined application.
Exemptions are savings that contribute to lowering a homeowner’s property tax bill. The most common is the Homeowner Exemption, which saves a Cook County property owner an average of $973 each year.
Many exemptions automatically renew this year due to COVID-19. Homeowners can check the Cook County Property Tax Portal website, then review the Exemption History and Status section to determine which exemptions they received last year and if they will auto-renew this year. New homeowners and those that need to reapply can do so by completing the online application.
Exemption deductions only appear on the second installation property tax bill which is issued later this year. More information about each exemption follows:
Homeowner exemption. Most homeowners are eligible for this exemption if they own and occupy the property as their principal place of residence. Once this exemption is applied, the Assessor’s Office auto-renews it for you each year. This exemption provides savings by reducing the equalized assessed value of an eligible property.
senior exemption Most senior homeowners are eligible for this exemption if they are 65 years of age or older and own and occupy their property as their principal place of residence. Once this exemption is applied, the Assessor’s Office automatically renews it for you each year. A senior exemption provides property tax savings by reducing the equalized assessed value of an eligible property.
Senior Freeze Exemption. Most homeowners are eligible for this exemption if they meet the requirements for the Senior Exemption and had a total household annual income of $65,000 or less in the calendar year 2020. This exemption provides significant savings by “freezing” the equalized assessed value (EAV) of an eligible property. This exemption will automatically renew for the 2021 tax year due to the COVID-19 pandemic.
Persons with Disabilities Exemption. This exemption provides disabled homeowners with an annual $2,000 reduction in the EAV of the property. It will also automatically renew due to COVID-19.
Returning Veterans Exemption. This exemption gives military veterans returning from active duty in armed conflict a $5,000 reduction in the EAV of their property – but only for the taxable year in which they return.
Disabled Veterans Standard Homeowner Exemption. Veterans with a service-connected disability, as certified by the United States Department of Veterans Affairs, are provided with a reduction in the EAV of their property. The amount of the reduction depends on the level of disability.
Home improvement exemption. This exemption allows homeowners to add improvements to their home that add to its value, without being taxed, on up to $75,000 of the added value for up to four years. For example, a homeowner can increase the building’s square footage or make repairs after structural flood damage without increasing the home’s assessed value.
Due to the high volume of exemption applications, the processing time is approximately eight weeks, according to the assessor. Once a homeowner’s exemption application is processed the property owner will receive an email stating whether the application is completed or declined.