103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3279

 

Introduced 2/17/2023, by Rep. Blaine Wilhour

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 200/15-175
35 ILCS 200/17-10
35 ILCS 200/Art. 31 rep.
765 ILCS 5/40 new
765 ILCS 5/41 new

    Repeals the Real Estate Transfer Tax Law of the Property Code. Moves provisions concerning the real estate transfer declarations and exemptions to the Conveyance Act. Makes conforming changes.


LRB103 05276 SPS 50294 b

 

 

A BILL FOR

 

HB3279LRB103 05276 SPS 50294 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Property Tax Code is amended by changing
5Sections 15-175 and 17-10 as follows:
 
6    (35 ILCS 200/15-175)
7    Sec. 15-175. General homestead exemption.
8    (a) Except as provided in Sections 15-176 and 15-177,
9homestead property is entitled to an annual homestead
10exemption limited, except as described here with relation to
11cooperatives or life care facilities, to a reduction in the
12equalized assessed value of homestead property equal to the
13increase in equalized assessed value for the current
14assessment year above the equalized assessed value of the
15property for 1977, up to the maximum reduction set forth
16below. If however, the 1977 equalized assessed value upon
17which taxes were paid is subsequently determined by local
18assessing officials, the Property Tax Appeal Board, or a court
19to have been excessive, the equalized assessed value which
20should have been placed on the property for 1977 shall be used
21to determine the amount of the exemption.
22    (b) Except as provided in Section 15-176, the maximum
23reduction before taxable year 2004 shall be $4,500 in counties

 

 

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1with 3,000,000 or more inhabitants and $3,500 in all other
2counties. Except as provided in Sections 15-176 and 15-177,
3for taxable years 2004 through 2007, the maximum reduction
4shall be $5,000, for taxable year 2008, the maximum reduction
5is $5,500, and, for taxable years 2009 through 2011, the
6maximum reduction is $6,000 in all counties. For taxable years
72012 through 2016, the maximum reduction is $7,000 in counties
8with 3,000,000 or more inhabitants and $6,000 in all other
9counties. For taxable years 2017 through 2022, the maximum
10reduction is $10,000 in counties with 3,000,000 or more
11inhabitants and $6,000 in all other counties. For taxable
12years 2023 and thereafter, the maximum reduction is $10,000 in
13counties with 3,000,000 or more inhabitants, $8,000 in
14counties that are contiguous to a county of 3,000,000 or more
15inhabitants, and $6,000 in all other counties. If a county has
16elected to subject itself to the provisions of Section 15-176
17as provided in subsection (k) of that Section, then, for the
18first taxable year only after the provisions of Section 15-176
19no longer apply, for owners who, for the taxable year, have not
20been granted a senior citizens assessment freeze homestead
21exemption under Section 15-172 or a long-time occupant
22homestead exemption under Section 15-177, there shall be an
23additional exemption of $5,000 for owners with a household
24income of $30,000 or less.
25    (c) In counties with fewer than 3,000,000 inhabitants, if,
26based on the most recent assessment, the equalized assessed

 

 

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1value of the homestead property for the current assessment
2year is greater than the equalized assessed value of the
3property for 1977, the owner of the property shall
4automatically receive the exemption granted under this Section
5in an amount equal to the increase over the 1977 assessment up
6to the maximum reduction set forth in this Section.
7    (d) If in any assessment year beginning with the 2000
8assessment year, homestead property has a pro-rata valuation
9under Section 9-180 resulting in an increase in the assessed
10valuation, a reduction in equalized assessed valuation equal
11to the increase in equalized assessed value of the property
12for the year of the pro-rata valuation above the equalized
13assessed value of the property for 1977 shall be applied to the
14property on a proportionate basis for the period the property
15qualified as homestead property during the assessment year.
16The maximum proportionate homestead exemption shall not exceed
17the maximum homestead exemption allowed in the county under
18this Section divided by 365 and multiplied by the number of
19days the property qualified as homestead property.
20    (d-1) In counties with 3,000,000 or more inhabitants,
21where the chief county assessment officer provides a notice of
22discovery, if a property is not occupied by its owner as a
23principal residence as of January 1 of the current tax year,
24then the property owner shall notify the chief county
25assessment officer of that fact on a form prescribed by the
26chief county assessment officer. That notice must be received

 

 

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1by the chief county assessment officer on or before March 1 of
2the collection year. If mailed, the form shall be sent by
3certified mail, return receipt requested. If the form is
4provided in person, the chief county assessment officer shall
5provide a date stamped copy of the notice. Failure to provide
6timely notice pursuant to this subsection (d-1) shall result
7in the exemption being treated as an erroneous exemption. Upon
8timely receipt of the notice for the current tax year, no
9exemption shall be applied to the property for the current tax
10year. If the exemption is not removed upon timely receipt of
11the notice by the chief assessment officer, then the error is
12considered granted as a result of a clerical error or omission
13on the part of the chief county assessment officer as
14described in subsection (h) of Section 9-275, and the property
15owner shall not be liable for the payment of interest and
16penalties due to the erroneous exemption for the current tax
17year for which the notice was filed after the date that notice
18was timely received pursuant to this subsection. Notice
19provided under this subsection shall not constitute a defense
20or amnesty for prior year erroneous exemptions.
21    For the purposes of this subsection (d-1):
22    "Collection year" means the year in which the first and
23second installment of the current tax year is billed.
24    "Current tax year" means the year prior to the collection
25year.
26    (e) The chief county assessment officer may, when

 

 

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1considering whether to grant a leasehold exemption under this
2Section, require the following conditions to be met:
3        (1) that a notarized application for the exemption,
4    signed by both the owner and the lessee of the property,
5    must be submitted each year during the application period
6    in effect for the county in which the property is located;
7        (2) that a copy of the lease must be filed with the
8    chief county assessment officer by the owner of the
9    property at the time the notarized application is
10    submitted;
11        (3) that the lease must expressly state that the
12    lessee is liable for the payment of property taxes; and
13        (4) that the lease must include the following language
14    in substantially the following form:
15            "Lessee shall be liable for the payment of real
16        estate taxes with respect to the residence in
17        accordance with the terms and conditions of Section
18        15-175 of the Property Tax Code (35 ILCS 200/15-175).
19        The permanent real estate index number for the
20        premises is (insert number), and, according to the
21        most recent property tax bill, the current amount of
22        real estate taxes associated with the premises is
23        (insert amount) per year. The parties agree that the
24        monthly rent set forth above shall be increased or
25        decreased pro rata (effective January 1 of each
26        calendar year) to reflect any increase or decrease in

 

 

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1        real estate taxes. Lessee shall be deemed to be
2        satisfying Lessee's liability for the above mentioned
3        real estate taxes with the monthly rent payments as
4        set forth above (or increased or decreased as set
5        forth herein).".
6    In addition, if there is a change in lessee, or if the
7lessee vacates the property, then the chief county assessment
8officer may require the owner of the property to notify the
9chief county assessment officer of that change.
10    This subsection (e) does not apply to leasehold interests
11in property owned by a municipality.
12    (f) "Homestead property" under this Section includes
13residential property that is occupied by its owner or owners
14as his or their principal dwelling place, or that is a
15leasehold interest on which a single family residence is
16situated, which is occupied as a residence by a person who has
17an ownership interest therein, legal or equitable or as a
18lessee, and on which the person is liable for the payment of
19property taxes. For land improved with an apartment building
20owned and operated as a cooperative, the maximum reduction
21from the equalized assessed value shall be limited to the
22increase in the value above the equalized assessed value of
23the property for 1977, up to the maximum reduction set forth
24above, multiplied by the number of apartments or units
25occupied by a person or persons who is liable, by contract with
26the owner or owners of record, for paying property taxes on the

 

 

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1property and is an owner of record of a legal or equitable
2interest in the cooperative apartment building, other than a
3leasehold interest. For land improved with a life care
4facility, the maximum reduction from the value of the
5property, as equalized by the Department, shall be multiplied
6by the number of apartments or units occupied by a person or
7persons, irrespective of any legal, equitable, or leasehold
8interest in the facility, who are liable, under a life care
9contract with the owner or owners of record of the facility,
10for paying property taxes on the property. For purposes of
11this Section, the term "life care facility" has the meaning
12stated in Section 15-170.
13    "Household", as used in this Section, means the owner, the
14spouse of the owner, and all persons using the residence of the
15owner as their principal place of residence.
16    "Household income", as used in this Section, means the
17combined income of the members of a household for the calendar
18year preceding the taxable year.
19    "Income", as used in this Section, has the same meaning as
20provided in Section 3.07 of the Senior Citizens and Persons
21with Disabilities Property Tax Relief Act, except that
22"income" does not include veteran's benefits.
23    (g) In a cooperative or life care facility where a
24homestead exemption has been granted, the cooperative
25association or the management of the cooperative or life care
26facility shall credit the savings resulting from that

 

 

HB3279- 8 -LRB103 05276 SPS 50294 b

1exemption only to the apportioned tax liability of the owner
2or resident who qualified for the exemption. Any person who
3willfully refuses to so credit the savings shall be guilty of a
4Class B misdemeanor.
5    (h) Where married persons maintain and reside in separate
6residences qualifying as homestead property, each residence
7shall receive 50% of the total reduction in equalized assessed
8valuation provided by this Section.
9    (i) In all counties, the assessor or chief county
10assessment officer may determine the eligibility of
11residential property to receive the homestead exemption and
12the amount of the exemption by application, visual inspection,
13questionnaire or other reasonable methods. The determination
14shall be made in accordance with guidelines established by the
15Department, provided that the taxpayer applying for an
16additional general exemption under this Section shall submit
17to the chief county assessment officer an application with an
18affidavit of the applicant's total household income, age,
19marital status (and, if married, the name and address of the
20applicant's spouse, if known), and principal dwelling place of
21members of the household on January 1 of the taxable year. The
22Department shall issue guidelines establishing a method for
23verifying the accuracy of the affidavits filed by applicants
24under this paragraph. The applications shall be clearly marked
25as applications for the Additional General Homestead
26Exemption.

 

 

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1    (i-5) This subsection (i-5) applies to counties with
23,000,000 or more inhabitants. In the event of a sale of
3homestead property, the homestead exemption shall remain in
4effect for the remainder of the assessment year of the sale.
5Upon receipt of a transfer declaration transmitted by the
6recorder pursuant to Section 40 of the Conveyances Act Section
731-30 of the Real Estate Transfer Tax Law for property
8receiving an exemption under this Section, the assessor shall
9mail a notice and forms to the new owner of the property
10providing information pertaining to the rules and applicable
11filing periods for applying or reapplying for homestead
12exemptions under this Code for which the property may be
13eligible. If the new owner fails to apply or reapply for a
14homestead exemption during the applicable filing period or the
15property no longer qualifies for an existing homestead
16exemption, the assessor shall cancel such exemption for any
17ensuing assessment year.
18    (j) In counties with fewer than 3,000,000 inhabitants, in
19the event of a sale of homestead property the homestead
20exemption shall remain in effect for the remainder of the
21assessment year of the sale. The assessor or chief county
22assessment officer may require the new owner of the property
23to apply for the homestead exemption for the following
24assessment year.
25    (k) Notwithstanding Sections 6 and 8 of the State Mandates
26Act, no reimbursement by the State is required for the

 

 

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1implementation of any mandate created by this Section.
2    (l) The changes made to this Section by this amendatory
3Act of the 100th General Assembly are effective for the 2018
4tax year and thereafter.
5(Source: P.A. 102-895, eff. 5-23-22.)
 
6    (35 ILCS 200/17-10)
7    Sec. 17-10. Sales ratio studies. The Department shall
8monitor the quality of local assessments by designing,
9preparing and using ratio studies, and shall use the results
10as the basis for equalization decisions. In compiling sales
11ratio studies, the Department shall exclude from the reported
12sales price of any property any amounts included for personal
13property and, for sales occurring through December 31, 1999,
14shall exclude seller paid points. The Department shall not
15include in its sales ratio studies sales of property which
16have been platted and for which an increase in the assessed
17valuation is restricted by Section 10-30. The Department shall
18not include in its sales ratio studies the initial sale of
19residential property that has been converted to condominium
20property. The Department shall include compulsory sales
21occurring on or after January 1, 2011 in its sales ratio
22studies. The Department shall also consider whether the
23compulsory sale would otherwise be considered an arm's length
24transaction, based on existing sales ratio study standards.
25    When the declaration required under Section 40 of the

 

 

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1Conveyances Act the Real Estate Transfer Tax Law contains
2financing information required under Section 31-25, the
3Department shall adjust sales prices to exclude seller-paid
4points and shall adjust sales prices to "cash value" when
5seller related financing is used that is different than the
6prevailing cost of cash. The prevailing cost of cash for sales
7occurring on or after January 1, 1992 shall be established as
8the monthly average 30-year fixed Primary Mortgage Market
9Survey rate for the North Central Region as published weekly
10by the Federal Home Loan Mortgage Corporation, as computed by
11the Department, or such other rate as determined by the
12Department. This rate shall be known as the survey rate. For
13sales occurring on or after January 1, 1992, through December
1431, 1999, adjustments in the prevailing cost of cash shall be
15made only after the survey rate has been at or above 13% for 12
16consecutive months and will continue until the survey rate has
17been below 13% for 12 consecutive months. For sales occurring
18on or after January 1, 2000, adjustments for seller paid
19points and adjustments in the prevailing cost of cash shall be
20made only after the survey rate has been at or above 13% for 12
21consecutive months and will continue until the survey rate has
22been below 13% for 12 consecutive months. The Department shall
23make public its adjustment procedure upon request.
24(Source: P.A. 96-1083, eff. 7-16-10.)
 
25    (35 ILCS 200/Art. 31 rep.)

 

 

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1    Section 10. The Property Tax Code is amended by repealing
2Article 31.
 
3    Section 15. The Conveyances Act is amended by adding
4Sections 40 and 41 as follows:
 
5    (765 ILCS 5/40 new)
6    Sec. 40. Transfer declaration. At the time a deed, a
7document transferring a controlling interest in real property,
8or trust document is presented for recordation, or within 3
9business days after the transfer is effected, whichever is
10earlier, there shall also be presented to the recorder or
11registrar of titles a declaration, signed by at least one of
12the sellers and also signed by at least one of the buyers in
13the transaction or by the attorneys or agents for the sellers
14or buyers. The declaration shall state information including,
15but not limited to: (1) the value of the real property or
16beneficial interest in real property located in Illinois so
17transferred; (2) the parcel identifying number of the
18property; (3) the legal description of the property; (4) the
19date of the deed, the date the transfer was effected, or the
20date of the trust document; (5) the type of deed, transfer, or
21trust document; (6) the address of the property; (7) the type
22of improvement, if any, on the property; (8) information as to
23whether the transfer is between related individuals or
24corporate affiliates or is a compulsory transaction; (9) the

 

 

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1lot size or acreage; (10) the value of personal property sold
2with the real estate; (11) the year the contract was initiated
3if an installment sale; (12) any homestead exemptions, as
4provided in Sections 15-170, 15-172, 15-175, and 15-176 of the
5Property Tax Code as reflected on the most recent annual tax
6bill; (13) the name, address, and telephone number of the
7person preparing the declaration; and (14) whether the
8transfer is pursuant to compulsory sale. Except as provided in
9Section 41, a deed, a document transferring a controlling
10interest in real property, or trust document shall not be
11accepted for recordation unless it is accompanied by a
12declaration containing all the information requested in the
13declaration. When the declaration is signed by an attorney or
14agent on behalf of sellers or buyers who have the power of
15direction to deal with the title to the real estate under a
16land trust agreement, the trustee being the mere repository of
17record legal title with a duty of conveying the real estate
18only when and if directed in writing by the beneficiary or
19beneficiaries having the power of direction, the attorneys or
20agents executing the declaration on behalf of the sellers or
21buyers need identify only the land trust that is the
22repository of record legal title and not the beneficiary or
23beneficiaries having the power of direction under the land
24trust agreement. The declaration form shall be prescribed by
25the Department of Revenue and shall contain sales information
26questions. The subject of the financing questions shall

 

 

HB3279- 14 -LRB103 05276 SPS 50294 b

1include any direct seller participation in the financing of
2the sale or information on financing that is unconventional so
3as to affect the fair cash value received by the seller.
 
4    (765 ILCS 5/41 new)
5    Sec. 41. Exemptions. The following deeds or trust
6documents shall be exempt from the transfer declaration
7described in Section 40:
8        (1) Deeds representing real estate transfers made
9    before January 1, 1968, but recorded after that date and
10    trust documents executed before January 1, 1986, but
11    recorded after that date.
12        (2) Deeds to or trust documents relating to (i)
13    property acquired by any governmental body or from any
14    governmental body, (ii) property or interests transferred
15    between governmental bodies, or (iii) property acquired by
16    or from any corporation, society, association, foundation
17    or institution organized and operated exclusively for
18    charitable, religious or educational purposes. However,
19    deeds or trust documents, other than those in which the
20    Administrator of Veterans Affairs of the United States is
21    the grantee pursuant to a foreclosure proceeding, shall
22    not be exempt from filing the declaration.
23        (3) Deeds or trust documents that secure debt or other
24    obligation.
25        (4) Deeds or trust documents that, without additional

 

 

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1    consideration, confirm, correct, modify, or supplement a
2    deed or trust document previously recorded.
3        (5) Deeds or trust documents where the actual
4    consideration is less than $100.
5        (6) Tax deeds.
6        (g) Deeds or trust documents that release property
7    that is security for a debt or other obligation.
8        (7) Deeds of partition.
9        (8) Deeds or trust documents made pursuant to mergers,
10    consolidations or transfers or sales of substantially all
11    of the assets of corporations under plans of
12    reorganization under the Federal Internal Revenue Code or
13    Title 11 of the Federal Bankruptcy Act.
14        (9) Deeds or trust documents made by a subsidiary
15    corporation to its parent corporation for no consideration
16    other than the cancellation or surrender of the
17    subsidiary's stock.
18        (10) Deeds when there is an actual exchange of real
19    estate and trust documents when there is an actual
20    exchange of beneficial interests, except that that money
21    difference or money's worth paid from one to the other is
22    not exempt from the tax. These deeds or trust documents,
23    however, shall not be exempt from filing the declaration.
24        (11) Deeds issued to a holder of a mortgage, as
25    defined in Section 15-103 of the Code of Civil Procedure,
26    pursuant to a mortgage foreclosure proceeding or pursuant

 

 

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1    to a transfer in lieu of foreclosure.
2        (12) A deed or trust document related to the purchase
3    of a principal residence by a participant in the program
4    authorized by the Home Ownership Made Easy Act, except
5    that those deeds and trust documents shall not be exempt
6    from filing the declaration.