Veterans Property Tax Exemption Illinois

By Steven A Leahy

Finally, Illinois legislators proposed a bill that I think everyone can agree. Senate Bill 107 (SB 107) provides tax relief for disabled veterans. This bill sailed through the Illinois house and senate without opposition. That’s right, both chambers voted unanimously to pass this bill and Governor Rauner signed it. So, this bill recently became the law of the land. It’s about time the men and women who have given so much for our country are given some form of relief.

SB 107 (Veterans Property Tax Exemption Illinois) creates a multi-tiered set of exemptions from local property taxes for Illinois homeowners who have a service connected disability. The tiers are based on the U.S. Department of Veterans Affairs certification of disability. If a veteran has been certified as at least 30 percent disabled but less than 50 percent, that veteran would qualify for an annual property tax exemption of $2,500.00. If the veteran is certified as least 50 percent disabled, but less than 70 percent, that veteran would qualify for an annual property tax exemption of $5,000.00. And finally, if a veteran is certified to have a disability of 70 percent of greater, “the property is exempt from taxation.”

Understanding property taxes is almost impossible in Illinois. Determining the property tax is dependant on three factors – The assessed value less exemptions (Adjusted Value), multiplied by the tax rate. The assessed value depends on the market value of the property and determines your share of all the taxes paid in your neighborhood. Our sample Vet has a property worth $180,000.00 with an assessed value of $80,000.00.

Next we subtract allowed exemptions from the assessed value, which gives us the Adjusted Value. This is how it works. SB 107 allows exemptions, the first tier grants an exemption of $2,500.00. Veterans in the first tier can deduct $2,500.00 from the assessed value of their property – in addition to any other exemptions they may be eligible for (e.g. homestead, senior citizens, etc.). The second tier may deduct $5,000.00 and the final tier is totally exempt from all property taxes.

Our sample Vet is certified 51% disabled and eligible for the second tier exemption, or $5,000.00. In addition, let’s assume our sample Vet can subtract another $6,000.00 automatic owner-occupancy exemption and perhaps a senior citizen exemption of $4,000.00 (the maximum senior citizen exemption in Illinois). Added together, this veteran would be eligible for $15,000.00 in exemptions. In our example, an accessed value of $80,000.00 less the exemptions of $15,000.00, or an Adjusted Value of $65,000.00.

Finally, we multiply that Adjusted Value by the tax rate of that neighborhood. Our sample Vet lives in Cook County and faces a tax rate of 9.964%. Tax rates differ by communities, depending on all the local governments providing services in your neighborhood. Taxing bodies include municipalities, School Districts, Park Districts, Sanitary Districts, and libraries (there may be others).

Veteran is certified second tier disabled, total exemptions of $15,000.00 with a total Adjusted Value of $65,000.00, multiplied by the tax rate of 9.964%, for a tax bill of $6,476.60, compared to the property tax bill without the SB 107 exemption of $6,974.80. Our sample Vet would realize a total savings of $498.20.

There are nearly 28,000 veterans with service related disabilities in Illinois. This new law (Veterans Property Tax Exemption Illinois) will help those veterans – and we should all be grateful to the veterans and this new law that recognizes their contributions to all of us. If you have questions about how this new law can work for you call Opem Tax Resolutions & The Law Office of Steven A. Leahy, PC (312) 664-6649. Call NOW to set up your FREE Consultation.