Taxes, more specifically property taxes, are unavoidable, but there are ways to reduce them. This will require the property owner(s) to take action. Not all options will apply to everyone, but as a property owner, you will likely find at least one opportunity. It could be one you have missed out on to reduce taxes in previous years, which you may still be able to obtain.
Taxes are typically imposed at the local level, but there are state imposed limits. More on that through:
Tax Policy Center (from the Brookings Institution & Urban Institute)
How do property taxes work and what can you do to reduce them?
Here are important 2023 dates to note for Cook County:
April 3, 2023 (past) - the new first installment due date for Cook County. It used to be March 1, but a law signed in December 2022 changed this. (1 of 2 installments)
April 10, 2023 - 2022 exemption applications become available in Cook County
More here on the Cook County Treasurer's website.
Live in another county? Check your County Treasurer’s website. There are 42 counties in Illinois, the largest being Cook, Lake, & DuPage.
In Illinois, homeowners pay property taxes after closing on their property sale. This can be confusing because property taxes are paid in arrears, meaning taxes are paid for the previous year in the following year, typically why a prorated tax credit is provided by the seller to the buyer vs. paid to the county for taxes on every day the previous seller owned that property in that year.
How can property owners reduce property taxes?
The most common ways are through exemptions, certificate of error (where available), filing a property tax appeal, and tax deferral programs.
Exemptions
Exemptions are:
for a primary residence of the owner(s) or someone who holds interest
must be initially filed. Some may auto-renew, but that is not true for all
available for property owners in general and additional exemptions are available for those that meet additional eligibility criteria, such as:
Are a senior citizen
Are a veteran
Have a disability
Low-income
Made eligible home improvement(s) that would result in added property value for particular property classes
Your property was impacted by a natural disaster
You can find out more on the Illinois Department of Revenue site here.
Once you are approved for an exemption, those exemptions will be applied to your second property tax installment bill.
If you qualified for an exemption but missed the year in which you could claim that exemption, in some cases, you can submit a certificate of error to still receive that tax credit from previous years.
Here are county property exemption pages for the three most populated counties in the state of Illinois:
Certificate of Error
A Certificate of Error is when the County Assessor’s Office can issue changes to tax bills from the previous three years and the current tax year.
This means in the year 2023, you can request a certificate of error for 2019, 2020, 2021, & 2022 (the current tax year).
This can be used for missed exemptions that you were eligible for and correcting assessed property valuations if incorrect on an issued tax bill.
Cook County provides Certificate of Errors (only found for this county due to the 3,000,000+ population it seems).
Filing a Tax Appeal
Tax appeals can be filed with a tax attorney or property owner the year the property is assessed and when a township or local area accepts challenges. Property is assessed once every four years, three years in Cook County, with the exception of farmland. More on that from the Illinois Department of Revenue here. For residential properties, you may also be able to appeal a previous year’s appeal.
Here is a link to Cook County’s Assessment & Appeals Calendar: https://www.cookcountyassessor.com/assessment-calendar-and-deadlines
Property that is collectively owned, like a condominium building, may decide to hire an attorney to appeal taxes on their behalf. This can help reduce the attorney fees per owner. When taxes are appealed, comparable properties must be provided with the appeal. If you are interested in this option, it is important to weigh the time you spend to appeal with the cost to hire an attorney.
Tax Deferral Programs
The most common statewide tax deferral program is for eligible senior citizens. You can read more about it on the Illinois Department of Revenue’s website here or Cook County’s here.
The tax deferral program works like a loan. The deferred payments are due when the property is sold. This program is available across the state of Illinois. Note, the deadline is March 1st of every year. Interest accrues currently at a 6% interest rate. It will also allow you to defer special assessments for taxes, not to be confused with the common HOA-related use for those new to the use of this term outside the world of shared property ownership typical of condominium buildings. We highly recommend fully understanding this program, what this means for your situation, and if it is something you want to participate in. Late payments will also incur a cost.