One way for owners of historic homes to save on Illinois property taxes is to enroll in the Property Tax Assessment Freeze Program. While rehabbing historic homes in Illinois can be a challenge that’s both costly and time-consuming, the Property Tax Assessment Freeze Program is intended to alleviate some of these costs by relieving homeowners of their tax burden.
Specifically, the program works by freezing the assessed value of homes that are historic, occupied by the owner, and have served as an owner’s principal residence for at least eight years upon the owner’s decision to rehabilitate them. If the rehabilitation is approved, individuals may qualify for the program. Once a homeowner has enrolled in the program, the home’s assessed value returns to the market level over the course of four years.
The Illinois State Historic Preservation Office has made this program entirely free to homeowners throughout Illinois. Ultimately, the program effectively rewards homeowners who undertake rehabbing projects to restore historic properties.
If property owners are planning on rehabbing a historic home, there are ways for them to get approved for the Property Tax Assessment Freeze Program. First, the property must meet certain conditions, including:
- The home has to be a certified historic structure. These structures either appear on the National Register of Historic Places or are designated historic structures in a community through an approved historic-preservation ordinance.
- It also must be a single-family, principal residence that the owner occupies, or it needs to be a condominium building, cooperative building, or an owner-occupied apartment complex with a maximum of six units.
- The rehabilitation needs to be over 25% of the fair market value as determined by the property’s assessor, and it must meet the Secretary of the Interior’s “Standards for Rehabilitation.”
If an individual meets these criteria, they will need to take the following steps:
Individuals can first consult the Illinois State Historic Preservation Office or their local landmark commission to find out if a historic home is considered a certified historic structure. They can then contact an assessor or look at a previous property tax bill to determine the fair market value for the property.
Additionally, individuals can figure out whether rehabilitation will cost more than 25% of the fair market value and speak with the Illinois State Historic Preservation Office to find out if the property meets their “Standards for Rehabilitation.”
Property owners can request an application from the Illinois State Historic Preservation Office for the program. Before rehabilitation begins, they can complete and submit Part 1 and 2 of the application, attaching photos of the property and rehabilitation plans before construction begins. The State Historic Preservation Office can then decide whether to approve the work.
Following rehabilitation, individuals can submit Part 3 of the application, attaching photos of the finished project along with documentation pertaining to costs. The State Historic Preservation Office may then send a Certificate of Rehabilitation.
When buying a historic home that needs work, taking these steps can help owners save money and make rehabilitation less financially straining.