Homeowner’s usually know that they are entitled to certain tax benefits when they are owner-occupants. From an income tax point of view, mortgage interest and real estate taxes can usually be deducted when calculating federal income tax liability. Homeowner’s also know that they are entitled to a “General Homestead Exemption” – a tax break reducing the assessed value of a property. Senior Citizens living in their home typically can apply for an additional “Senior Exemption” and so on.
However, can a tenant take advantage of a “General Homestead Exemption”, worth about $500.00 in tax savings?
According to Mark D. Armstrong, the Kane County Supervisor of Assessments, the answer might just be yes! Here is what Mark has to say in his ask Mark section of the Kane County website:
| Q: I live in a single-family home, but I don’t own it; I pay rent to a landlord. Am I eligible for a homestead exemption? |
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A: Yes, but only if certain conditions are met. For the purposes of the General Homestead exemption, the Illinois Property Tax Code defines “Homestead property” as “residential property that is occupied by its owner or owners as his or their principal dwelling place, or that is a leasehold interest on which a single family residence is situated, which is occupied as a residence by a person who has an ownership interest therein, legal or equitable or as a lessee, and on which the person is liable for the payment of property taxes.” The exemption also requires occupancy as of January 1 of the year in question.
So, lessees of single-family dwellings who occupied the property as of January 1 can be eligible, provided the lessees (NOT the property owners) are the ones liable for paying the property taxes.But how can this liability be established? The terms of the lease are a good start; the lease needs to clearly state that the lessee is going to pay the taxes. However, some leases are using boilerplate language such as this, which I found in a lease in Elgin: “Tenant shall be liable for the payment of real estate taxes with respect to the Residence, in accordance with the terms and conditions of Section 200/15-175 of Chapter 35 Illinois Compiled Statues, as amended (35ILCS 200/15-175,(194)). Tenant shall be deemed to be satisfying Tenant’s liability for such real estate taxes through the monthly rent payments as set forth above.” Despite its claims, such language is insufficient to meet the definition in the property tax code. In establishing the qualifications for this exemption, the General Assembly used the plain language cited above. If the General Assembly had intended payment of rent alone to satisfy the requirement of liability, it could have drafted the statute that way, and then every leased single-family home in Illinois would qualify for the exemption. However, by including the phrase “on which the person is liable for the payment of property taxes”, the General Assembly clearly did not intend to include all leased single-family homes.
If you meet these qualifications, you are eligible for the General Homestead Exemption, which will remove $6,000 of equalized assessed value from your property before taxes are calculated. You can call (630) 208-3818 for more information, or download the Application Form here. http://www.kanecountyassessments.org/AskMark.html |