Property tax relief for seniors

Senior citizens on fixed incomes may find relief in property taxes through the Owner-occupied Homeowner’s Exemption, the Senior Citizen’s Homestead Exemption, and the Senior Citizen’s Assessment Freeze Homestead Exemption.

The Owner-occupied Homeowner’s Exemption, for those owning (and residing in) single-family homes, condominiums, cooperatives, and one- to six-unit apartment buildings can nullify their current year equalized assessment value increase up to $3,500. If your home assessed for $100,000 last year, and it assesses for $105,000 this year, $3,500 of that $5,000 increase can be erased. You can qualify at any age. Most properties qualify for the full $3,500 benefit. Once you qualify, it becomes automatic each year.

The Senior Citizen Homestead Exemption applies to owners above age 65. This $2,000 exemption is subtracted from the equalized assessed value before the tax rate is applied to the equalized rate; it comes in addition to the $3,500 reduction for the Homeowner’s Exemption. Prove your age and ownership to the County Supervisor of Assessments by Dec. 21. No income requirements apply.

The Senior Citizen’s Assessment Freeze Homestead Exemption permits owners over age 65 to freeze their assessed property valuation for the remainder of their life—as long as the household earns less than $40,000 annually, and you own and occupy the property for a period spanning two Januarys. Renew this exemption each year, but renewal packets are sent to previously qualified homeowners. Notice: This program does not freeze the tax rate, only your property’s valuation, so expect some change in your tax bill. Because it freezes the tax valuation of your home even as the actual value likely increases, your savings add up over time.

The Senior Citizen’s Property Tax Deferral, allows a homeowner to delay payment on their property taxes until they sell, fail to occupy the home for a period of one year, or pass on, at which time the taxes would be paid by the proceeds of the sale, or by heirs. To qualify, the household must earn less than $40,000 annually. The state charges 6 percent annual interest on deferred taxes. A homeowner can no longer defer taxes when they have deferred a total amount equal to 80 percent of their equity in the property. So, if a person has paid off $80,000 of a $100,000 home, they cannot defer taxes and interest combined over $64,000 (80 percent of the $80,000 equity). Taking this deferral puts a lien on your property similar to the lien created when you mortgaged it—the state’s way of ensuring eventual payment. On your yearly IRS tax report, you continue to write off your property taxes even as you defer them. Unlike the other benefits described above, this exemption is overseen by the Winnebago County Treasurer’s Office. You must have owned and lived in your home (or qualifying home) for three years, with no delinquent property taxes. You re-qualify each year, but the Treasurer’s Office will send you notice annually. Be 65 years of age on or before June 1 the year you apply. Apply by March 1 of a given year to qualify.

Finally, the State of Illinois administers a program called Circuit Breaker, which offers property tax grants. The maximum possible is $700 per year, if you had no income. If you had, say, $10,000 annual income, you might receive as much as $250.

Locally, the Northwestern Illinois Area Agency on Aging (NIAAA) helps seniors apply to these programs. With a little persistence seniors can relieve pressure on their finances related to property taxes.

Patrick Murphy is a real estate agent living in Rockford, and can be reached at

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