Synopsis As Introduced Amends the Property Tax Code. Re-enacts the Senior Citizens Assessment Freeze Homestead Exemption. The exemption was created by Public Act 88-669, which has been held to be unconstitutional as a violation of the single subject clause of the Illinois Constitution. Includes validation provisions. Increases the maximum reduction for the Senior Citizens Homestead Exemption from $3,000 to $3,500 for taxable years 2006 and thereafter. Increases the maximum income limitation in the Senior Citizens Assessment Freeze Homestead Exemption from $45,000 to $50,000 for taxable years 2006 and thereafter. Amends the Senior Citizens Real Estate Tax Deferral Act. Increases the maximum income limitation under the Act from $40,000 to $45,000 for taxable years 2006 and thereafter. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
Housing Affordability Impact Note (Housing Development Authority)
While the increased income limits will help more Illinois seniors decrease the cost of owning a single family residence, there is insufficient information to calculate an exact dollar amount due to varying property tax rates and assessed valuations.
Fiscal Note (Dept. of Revenue)
There are approximately 698,000 properties with Senior Citizen Homestead Exemptions for 2005 taxes, payable in 2006. A $500 increase from $3,000 to $3,500 would reduce the tax base by $349 million statewide. At the statewide average property tax rate of 7.64%, those taxpayers would save $26.7 million. Many counties, particularly those subject to PTELL, would be able to raise tax rates to offset any losses. However, in many counties, the increased exemption would reduce the rate of growth in property taxes. The increase from $45,000 to $50,000 in the income limit for the Senior Citizens Assessment Freeze Homestead Exemption would increase the number of eligible by an estimated 15,000 taxpayers, based on information from income tax returns. The first year impact would be minimal, but the loss would grow over time as an increased number of assessments were frozen. At current levels, the assessment freeze reduces taxes by approximately $600 per taxpayer. The 15,000 additional eligible taxpayers would reduce local property taxes about $9 million statewide. When the income limit for the Senior Citizens Real Estate Tax Deferral Act was increased from $25,000 to $40,000, the number of participants remained flat. Increasing the income limit from $40,000 to $45,000 is not expected to have noticeable effect on local governments.
Senate Floor Amendment No. 2 Deletes everything after the enacting clause. Reinserts the provisions of the engrossed bill with the following changes: In the Senior Citizens Assessment Freeze Homestead Exemption provisions, sets forth the amount of the exemption for which an applicant is eligible to receive based upon the applicant's household income. In the Senior Citizens Real Estate Tax Deferral Act, increases the maximum income limitation under the Act to $50,000 (instead of $45,000 as provided in the engrossed bill). Effective immediately.