Hey there Chicago homeowner!
This article might not cover the most exciting topic in the world, but it’s definitely one that can save you thousands of dollars each year.
We’re talking about your Homeowner Exemption.
We know that property taxes are already a hefty chunk of your monthly expenses, so if we can find any way to save some money, we think it’s a good thing. Over the years, we’ve seen countless homeowners make simple (but avoidable) mistakes that end up costing them big time when it comes to their exemptions.
Who are we? We’re the Ben Lalez Team, a top-producing Compass real estate team in Chicago. And after helping over a thousand families navigate Chicago real estate over the last decade, we’ve seen pretty much every property tax situation you can imagine. Today, we’re sharing some insider knowledge about exemption mistakes that could be costing you.
Let’s dive into some of the most common mistakes we’ve seen and how you can avoid them!
1. The ‘Automatic Assumption’ Mistake
One of the most common mistakes we see is new homeowners assuming the Homeowner Exemption process happens automatically. Your exemption doesn’t magically appear when you buy a home, and it definitely doesn’t transfer over from the previous owner. You need to actively apply through the Cook County Assessor’s Office to receive this important tax reduction.
Think of it like this. When you move into a new home, you have to set up utilities in your name – you don’t leave them in the previous homeowner’s name. The Homeowner Exemption works the same way, so set a reminder to apply for it!
2. Missing Out On Multiple-Year Refunds
Here’s something many homeowners don’t realize. If you’ve never applied for the Homeowner Exemption, you might be entitled to claim missing exemptions for up to 3 years. How sweet would it be to get back a check for thousands of dollars?
Just remember that this refund isn’t automatic either. You need to specifically apply for a Certificate Of Error through the Cook County Assessor’s Office.
3. The ‘Set It And Forget It’ Mistake
Just because you’ve successfully applied for and received your exemption doesn’t mean you should just put it on autopilot and not think about it again. One Chicago homeowner shared their story about their bill suddenly jumping $1,400 because their exemption mysteriously disappeared.
Make sure to review your exemption carefully every year because mistakes happen way more than you think. Just think of it like checking your credit card statement each month.
4. Leaving Money On The Table
Did you know there are actually 8 different types of property tax exemptions available in Chicago? Many homeowners leave money on the table by not exploring all their options. Here are the property tax exemptions you might qualify for:
- Homeowner Exemption
- Senior Citizen Exemption
- Senior Freeze Exemption
- Longtime Homeowner Exemption
- Home Improvement Exemption
- Returning Veterans’ Exemption
- Disabled Veterans’ Exemption
- Disabled Persons’ Exemption
Each of these exemptions has its own requirements and potential savings, so read them carefully.
5. Misunderstanding Eligibility Requirements
A big mistake we see is homeowners not fully understanding the basic eligibility requirements for their exemptions. What’s key is that the property must be your principal residence to qualify for the Homeowner Exemption.
This becomes important if you own multiple properties or you’re planning to rent out your home. Even if you’re planning to temporarily rent out your property, you’ll need to notify the Assessor’s Office since this affects your eligibility. We’ve seen cases where homeowners were subject to penalties for improperly receiving exemptions.
6. Overlooking The Impact Of Home Improvements
Here’s something exciting you might not have know about. If you’ve made renovations to your home, you may qualify for the Home Improvement Exemption which allows up to $75,000 in improvements without increasing your property taxes for 4 years! The value of the exemption varies depending on the reduction of the assessed value and the tax rates where the property is located.
This exemption is available to owners of single-family homes, condominiums, cooperatives, and apartment buildings with up to six units, and will automatically be applied based on field checks for building permits conducted by the Cook County Assessor’s Office.
7. Not Addressing Administrative Errors
Even when you do everything right, mistakes can still happen on the administrative side. We’ve seen cases where payments were misapplied, property data was incorrect, or exemptions just disappeared from the system.
There was the case of one Chicago homeowner whose taxes were incorrectly marked unpaid due to a processing error. A spokesperson for Cook County confirmed that administrative errors happen all the time, so it’s important to find discrepancies and fix them fast.
8, Not Seeking Professional Advice
We know that property taxes and exemptions can be overwhelming. That’s why we recommend consulting a real estate attorney or tax professional to get accurate advice. Our real estate team can also provide you with insights to help you avoid errors and ensure you’re maximizing your benefits.
We know this might seem a lot to keep track of, but don’t let it overwhelm you. Property taxes and exemptions are just part of the homeownership journey, and with a little knowledge and preparation, you can avoid easy mistakes.
Remember, the Ben Lalez Team isn’t just here to help you find your perfect home. We’re here to support you through every step of homeownership. Whether you’re a first-time homebuyer trying to understand exemptions, or a longtime owner looking to ensure you’re not leaving money on the table, we’re always here to help.
After all, Chicago is an amazing city with so much to offer. Wouldn’t you rather spend your money exploring our world-class restaurants, enjoying summer festivals, or taking in a Cub’s game instead of overpaying your property taxes?
Drop us a line anytime. We’d love to chat about your real estate goals over a cup of coffee. We know the best spots in town! With the Ben Lalez Team in your corner, you’ve got a partner who knows every corner of this beautiful city we call home.
