Property Tax Exemptions in Illinois

While owning property comes with its fair share of responsibilities, one of the biggest financial considerations for homeowners is their property’s tax burden. Are you wondering how to avoid property taxes you don’t need to pay? If so, you’re in luck. For Lake Forest, Illinois residents, there’s a silver lining in the form of various property tax exemptions designed to reduce the financial strain on homeowners. 

Lake Forest offers varying opportunities for property owners to reduce their tax liabilities. These range from homestead exemptions tailored to seniors, disabled veterans, and returning veterans to specialized relief programs for individuals with disabilities. This comprehensive guide, from our Pasquesi Sheppard experts, delves into the world of property tax exemptions in Lake Forest, Illinois. We’ll provide insights into eligibility criteria, application processes, and the potential benefits each exemption can offer you.

General Homestead Exemption

The General Homestead Exemption is a property tax relief program reducing the tax burden for homeowners using their property as their primary residence or “homestead.” In Lake Forest, Illinois, the General Homestead Exemption provides an $8,000 reduction in your primary residence’s equalized assessed value (EAV), lowering your property tax liability. The exemption typically requires that the property be your primary residence as of Jan. 1 of the applicable tax year. Remember that only one property can receive this exemption per year of assessment.

Home Improvement Exemption

The Home Improvement Exemption, also known as the Home Improvement Freeze Exemption, in Lake Forest, Illinois, provides tax relief for homeowners who make extensive property improvements. The goal of this exemption is to encourage property owners to invest in their homes by making improvements, renovations, or additions. 

To qualify, the property in question must be your primary address, and the improvements must be significant enough to increase your property’s value. Once approved, the Home Improvement Exemption “freezes” your property’s assessed value at the pre-improvement level for four years, with a maximum deduction of $25,000 of your home’s EAV. Thus, your property’s assessed value will not increase during this time because of your improvements. 

Natural Disaster Exemption

The Natural Disaster Exemption offers a tax exemption for homestead properties where you’ve rebuilt structures damaged by a natural disaster. The events categorized as natural disasters include but are not limited to floods, fires, earthquakes, storms, winds, and long periods of severe inclement weather. 

To qualify, you must own or have a legal interest in the property that includes your single-family home during the assessment year. Also, you must be liable for the real estate tax payments and rebuild the residential structure within two years of the natural disaster. It’s important to remember that the square footage of the new structure cannot exceed 110% of the original structure’s square footage. 

Non-Homestead Exemptions

Non-Homestead Exemptions provide tax relief or exemptions for the properties you don’t use as a primary residence or homestead. Non-homestead properties can include commercial and industrial properties, vacant land, and other types of real estate that aren’t owner-occupied homes. Also, properties used for religious, educational, and charitable organizations are eligible for the exemption. You can even apply the exemption to state, federal, or local government units. 

Senior Homestead Exemption

The Senior Homestead Exemption gives an $8,000 tax reduction in a property’s assessed value when designated a senior citizen’s primary house. This exemption helps senior citizens manage their property tax burden and remain in their homes as they age. To be eligible for the senior homestead exemption, you must be 65 or older and live on the property as your principal address. You are also allowed to claim this exemption alongside the General Homestead Exemption. 

Homestead Exemption for Persons With Disabilities

The Homestead Exemption for Persons with Disabilities (HEPD) will help you reduce the property taxes of your primary home when you have a disability. It works by lowering your property EAV by $2,000. Where applicable, you may claim it with either the Senior or General Homestead Exemption.

However, you cannot claim this exemption with the $100,000 Disabled Veterans’ Exemption nor the Disabled Veterans’ Standard Homestead Exemption. And since you can only receive one of these, if you’re an eligible veteran with a disability, your best option is to apply for the most financially beneficial exemption.

To be eligible for this tax exemption, you must own or have a legal interest in the property or have lived in the home since Jan. 1 of the relevant tax year. In addition, you’ll need to supply proof of your Social Security Administration’s social security benefits or a copy of your Illinois Disabled Person Identification Card to confirm that you have a Class 2 or 2A disability for each assessment year.

Disabled Veterans Exemption

The Disabled Veterans Exemption (Adaptive Housing) program offers a property tax exemption of up to $100,000 of your home’s EAV if you’re a veteran or a veteran’s spouse. To qualify for this relief, you must have served in the U.S. Armed Forces and have a disability that the government classifies as eligible for special housing payments. 

Returning Veterans Exemption

The Returning Veterans’ Homestead Exemption can lower your property taxes if you’re an eligible veteran recently returning from active duty. This tax exemption reduces the EAV of your principal dwelling by $5,000 for up to two consecutive tax years. This typically includes the tax year you return from duty and the year after. To be eligible, you must live in Illinois and have served as part of the U.S. Armed Forces. You’ll also have to own or be liable for the property’s taxes, and it should be your primary home. 

Need Help With Your Taxes in Lake Forest?

Navigating your property taxes is tricky, especially with constantly changing laws and regulations. Would you like to have the peace of mind that you’re handling your property taxes as efficiently as possible? If so, you can chat with our experts at Pasquesi Sheppard. We offer the most reliable tax preparation services in or around Lake Forest, Illinois.

brown wooden house near green trees under blue sky during daytime  by Zander Betterton is licensed with Unsplash License