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RECENT PROPERTY TAX LEGISLATION - MAY 2010

Date Posted: 5/13/2010

RECENT PROPERTY TAX LEGISLATION - MAY 2010

TRAC maintains that our system of property tax assessments is broken. Band-aid solutions and ongoing legislative tinkering with exemptions should be replaced by real reform, namely, acquisition-based assessing (ABA).

 

An ABA law has been introduced in the Illinois House providing fair and predictable assessments for all properties. HB5355 may be read by clicking here.  We continue to speak with elected officials, business organizations and community groups to advocate this agenda of reform.

 

In the meantime, here’s an analysis on legislation that recently passed in the House and Senate intended to extend the phase-out of the 7%.

 

 

First, a short course in terminology:

General homestead exemption:  

     The standard homeowner exemption.

Alternative general homestead exemption

     Commonly referred to as the 7% Assessment Cap.

Long-time occupant homestead exemption

     For homeowners of ten years or more who meet certain income eligibility requirements.

Equalized Assessed Value, or EAV:

     The final taxable value of your property.

 

 

TO THE BILL:

SB3638 (click here to read the bill) applies only to homesteads and will delay the phase-out the 7% Cap by extending the Alternative General Homestead Exemption for another 3 years. It provides for a maximum EAV exemption of $20,000 in the first taxable year, $16,000 in the second year, and $12,000 in the third. At the end of three years, the Alternative General Homestead Exemption will end and revert to the general homestead exemption, currently at $6,000. The general exemption is inflexible and provides NO protection against large assessment jumps.

 

Since 2006, there has also been a Long-time Occupant Homestead Exemption. In general terms, homeowners who have resided in their homes for ten years or more, and have a household income of $75,000 or less will maintain a 7% assessment cap, with no limit on the amount of the exemption. (Ten-year homeowners with household incomes from $75,000 to $100,000 will receive a 10% assessment cap, with no limit on the exemption.)

 

The law passed in 2006 provides no sunset for the Long-time Occupant Homestead Exemption. In other words, even after the 7% assessment cap expires - the Long-time Occupant Homestead Exemption will remain in effect.

 

"…a county must first elect to be subject to the Alternative Homestead Exemption.  If does so elect, then the county will be subject to the Long-Time Homestead Exemption for all tax years thereafter (even after the Alternative Homestead Exemption expires).  Cook County has elected to be subject to the Alternative Homestead Exemption, so the Long-Time Homestead Exemption will continue to exist after 7% expires."

Michael Stone, Chief Deputy Assessor, Cook County Assessor's Office

 

We have learned from the Assessor’s office that applications for the Long-time Occupant Homestead Exemption should be mailed sometime this month. 

 

ABA UPDATE

TRAC supports the provisions of Acquisition Based Assessing that appear in SB3638, currently sponsored by Reps. Fritchey, Joyce, Harris, and Feigenholtz.

Click here to read the bill - since it applies to all properties (homeowner, apartment, industrial and commercial), we encourage Chicago's Chambers of Commerce to review the benefits of this legislation.

We are available to meet, discuss and continue the work of Property Tax REFORM in Illinois.



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