What are the most common Real Estate Tax Exemptions in Central Illinois?
It is important to know what the assessed value is on a property and what if any, exemptions the seller has. Here are the most common tax exemptions:
Homestead Revaluation Exemption
- Known as the owner-occupied exemption, this exemption lowers the equalized assessed value of your property by $6,000. To receive this exemption, you must:
- Have lived on the property on or before January 1st of the tax year.
- Have the exemption initiated by the Township Assessors Office.
- No annual application is required.
Senior Homestead Exemption
- This exemption lowers the equalized assessed value of your property by $5,000, and may be claimed in addition to the Homestead Exemption. To receive this exemption, you must:
- Have lived on the property on or before January 1 of the tax year.
- Have reached age 65 during the tax year.
- Apply for the exemption at the Assessor's Office.
You will need to bring a copy of the deed to the property and proof of age with you when you apply. Application required in first year only. The application is maintained automatically after the initial filing year.
Senior Assessment Freeze Exemption
This exemption freezes the taxable assessment on your property but does not freeze the tax rate. This exemption allows seniors who are 65 years of age or older during the assessment year with a total household income of $65,000 or less to freeze the assessed value of their home at a base year value and prevent any increase due to inflation. The base year is the year prior to the year you first qualify and apply for the exemption. You must file an application by September of every year if you expect to receive the exemption. A "base year" is established for which the EAV (equalized assessed value) is "frozen." The "base amount" will change if improvements are added. The exemption amount is the difference between the "frozen" base EAV and the current year EAV.
Rental Properties – no tax exemption
If you are purchasing a rental property, there is no owner-occupied exemption. If you purchase one of these properties to be owner-occupied, you will get this exemption.
What are the different ways to own real estate in Illinois?
In Illinois, there are several ways to hold title to residential real estate. Here are the most common ways:
1) Sole Ownership: When one person owns the property, it is known as sole ownership. The owner has complete control over the property and can sell, transfer or mortgage it without the consent of anyone else.
2) Tenancy in Common: This is a form of co-ownership where two or more people own the property together, each with an undivided interest in the property. Each owner can sell or transfer their share without the consent of the other owners, and if one owner dies, their share goes to their heirs.
3) Joint Tenancy with Right of Survivorship: In this type of co-ownership, two or more people own the property together, and when one owner dies, their share automatically passes to the surviving owner(s). This type of ownership avoids the need for probate upon the death of one owner.
4) Tenancy by the Entirety: This type of ownership is recognized in Illinois for married couples only. It provides for ownership of the property by both spouses, with the right of survivorship. If one spouse dies, the property passes automatically to the surviving spouse.
5) Land Trust: A land trust is a legal arrangement where the property is transferred into a trust, and the owner (trustee) manages the property on behalf of the beneficiaries. The beneficiaries have all the benefits of ownership, but the trustee has legal control over the property. Upon the death of the owner, the property passes to the beneficiaries without the need for probate.
It is important to consult with a real estate attorney or financial advisor to determine which type of ownership is best for your particular situation and goals.