Illinois Homeowners Could Get a $2000 Tax Break
The General Homestead Exemption provides certain property owners with valuable tax breaks under federal, Illinois and Cook County tax codes. Homestead rights and interests may also affect a bankruptcy filing and foreclosure proceedings.
In fact, a homestead exemption may prevent a family home from being sold to satisfy debts, such as a credit card debt or unpaid medical bills. The homestead exemption, however, cannot legally prevent a mortgage holder or bank from initiating foreclosure proceedings against a property owner who is in default on a home loan. Below is an overview of what a property owner should know about homestead exemptions in Illinois.
The General Homestead Exemption in Cook County
Homeowners in Cook County, Illinois, may file for an annual tax exemption on the following types of property, provided the property serves as their primary residence:
- single-family home;
- townhouse;
- condominium;
- co-op; or
- apartment building not exceeding six units.
Savings may be available anywhere from $250 to $2,000 per tax year. This figure is dependent on local tax rates and the current assessment of the property. This Homeowner Exemption is renewed automatically each year provided there has been no change in ownership of the property in question. As a first-time applicant, you must have become the occupant of a property as of January 1 of the tax year in which you intend to apply for the Homeowner Exemption.
The state’s General Homestead Exemption also impacts your ability to make a tax exemption for a home used as a primary residence. The exemption rate varies with the tax year and is impacted by the location of the property. For instance, homes within the city have historically qualified for lower exemption rates than homes in the North or South suburbs. A tax professional or attorney can provide a more specific estimate of your tax exemption rate.
How the Homestead Exemption May Impact Foreclosure
There are several ways in which the Homestead Exemption may factor into foreclosure proceedings. For instance:
- A property owner may take advantage of the property tax exemptions as a substantial cost-savings measure. Such savings may help a financially distressed homeowner allocate additional funds to pay off past-due mortgage bills.
- A homestead exemption may prevent a creditor from seizing a debtor’s family home as payment for past-due debts. The exception to this rule is cases in which a mortgage holder or deed trustee (such as the lending bank) seeks to foreclose upon a bank-owned property.
- A debtor may receive a portion of the proceeds from the sale of his or her foreclosed home, up to the limits provided under the homestead exemption (generally $15,000).
Generally speaking, in order for a property to qualify as a “homestead,” you must actually reside in the home in question.
The threat of foreclosure warrants swift action. Take advantage of a confidential, free case consultation if you have additional questions about options to prevent foreclosure. Call (312) 775-0980 today to schedule your evaluation.
