Full Text of HB3279 103rd General Assembly
HB3279 103RD GENERAL ASSEMBLY |
| | 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 | |
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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.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Property Tax Code is amended by changing | 5 | | Sections 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, | 9 | | homestead
property is
entitled to an annual homestead | 10 | | exemption limited, except as described here
with relation to | 11 | | cooperatives or life care facilities, to a reduction in the | 12 | | equalized assessed value
of homestead property equal to the | 13 | | increase in equalized assessed value for the
current | 14 | | assessment year above the equalized assessed value of the | 15 | | property for
1977, up to the maximum reduction set forth | 16 | | below. If however, the 1977
equalized assessed value upon | 17 | | which taxes were paid is subsequently determined
by local | 18 | | assessing officials, the Property Tax Appeal Board, or a court | 19 | | to have
been excessive, the equalized assessed value which | 20 | | should have been placed on
the property for 1977 shall be used | 21 | | to determine the amount of the exemption.
| 22 | | (b) Except as provided in Section 15-176, the maximum | 23 | | reduction before taxable year 2004 shall be
$4,500 in counties |
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| 1 | | with 3,000,000 or more
inhabitants
and $3,500 in all other | 2 | | counties. Except as provided in Sections 15-176 and 15-177, | 3 | | for taxable years 2004 through 2007, the maximum reduction | 4 | | shall be $5,000, for taxable year 2008, the maximum reduction | 5 | | is $5,500, and, for taxable years 2009 through 2011, the | 6 | | maximum reduction is $6,000 in all counties. For taxable years | 7 | | 2012 through 2016, the maximum reduction is $7,000 in counties | 8 | | with 3,000,000 or more
inhabitants
and $6,000 in all other | 9 | | counties. For taxable years 2017 through 2022, the maximum | 10 | | reduction is $10,000 in counties with 3,000,000 or more | 11 | | inhabitants and $6,000 in all other counties. For taxable | 12 | | years 2023 and thereafter, the maximum reduction is $10,000 in | 13 | | counties with 3,000,000 or more inhabitants, $8,000 in | 14 | | counties that are contiguous to a county of 3,000,000 or more | 15 | | inhabitants, and $6,000 in all other counties. If a county has | 16 | | elected to subject itself to the provisions of Section 15-176 | 17 | | as provided in subsection (k) of that Section, then, for the | 18 | | first taxable year only after the provisions of Section 15-176 | 19 | | no longer apply, for owners who, for the taxable year, have not | 20 | | been granted a senior citizens assessment freeze homestead | 21 | | exemption under Section 15-172 or a long-time occupant | 22 | | homestead exemption under Section 15-177, there shall be an | 23 | | additional exemption of $5,000 for owners with a household | 24 | | income of $30,000 or less.
| 25 | | (c) In counties with fewer than 3,000,000 inhabitants, if, | 26 | | based on the most
recent assessment, the equalized assessed |
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| 1 | | value of
the homestead property for the current assessment | 2 | | year is greater than the
equalized assessed value of the | 3 | | property for 1977, the owner of the property
shall | 4 | | automatically receive the exemption granted under this Section | 5 | | in an
amount equal to the increase over the 1977 assessment up | 6 | | to the maximum
reduction set forth in this Section.
| 7 | | (d) If in any assessment year beginning with the 2000 | 8 | | assessment year,
homestead property has a pro-rata valuation | 9 | | under
Section 9-180 resulting in an increase in the assessed | 10 | | valuation, a reduction
in equalized assessed valuation equal | 11 | | to the increase in equalized assessed
value of the property | 12 | | for the year of the pro-rata valuation above the
equalized | 13 | | assessed value of the property for 1977 shall be applied to the
| 14 | | property on a proportionate basis for the period the property | 15 | | qualified as
homestead property during the assessment year. | 16 | | The maximum proportionate
homestead exemption shall not exceed | 17 | | the maximum homestead exemption allowed in
the county under | 18 | | this Section divided by 365 and multiplied by the number of
| 19 | | days the property qualified as homestead property.
| 20 | | (d-1) In counties with 3,000,000 or more inhabitants, | 21 | | where the chief county assessment officer provides a notice of | 22 | | discovery, if a property is not
occupied by its owner as a | 23 | | principal residence as of January 1 of the current tax year, | 24 | | then the property owner shall notify the chief county | 25 | | assessment officer of that fact on a form prescribed by the | 26 | | chief county assessment officer. That notice must be received |
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| 1 | | by the chief county assessment officer on or before March 1 of | 2 | | the collection year. If mailed, the form shall be sent by | 3 | | certified mail, return receipt requested. If the form is | 4 | | provided in person, the chief county assessment officer shall | 5 | | provide a date stamped copy of the notice. Failure to provide | 6 | | timely notice pursuant to this subsection (d-1) shall result | 7 | | in the exemption being treated as an erroneous exemption. Upon | 8 | | timely receipt of the notice for the current tax year, no | 9 | | exemption shall be applied to the property for the current tax | 10 | | year. If the exemption is not removed upon timely receipt of | 11 | | the notice by the chief assessment officer, then the error is | 12 | | considered granted as a result of a clerical error or omission | 13 | | on the part of the chief county assessment officer as | 14 | | described in subsection (h) of Section 9-275, and the property | 15 | | owner shall not be liable for the payment of interest and | 16 | | penalties due to the erroneous exemption for the current tax | 17 | | year for which the notice was filed after the date that notice | 18 | | was timely received pursuant to this subsection. Notice | 19 | | provided under this subsection shall not constitute a defense | 20 | | or 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 | 23 | | second installment of the current tax year is billed. | 24 | | "Current tax year" means the year prior to the collection | 25 | | year. | 26 | | (e) The chief county assessment officer may, when |
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| 1 | | considering whether to grant a leasehold exemption under this | 2 | | Section, 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 | 7 | | lessee vacates the property, then the chief county assessment | 8 | | officer may require the owner of the property to notify the | 9 | | chief county assessment officer of that change. | 10 | | This subsection (e) does not apply to leasehold interests | 11 | | in property owned by a municipality. | 12 | | (f) "Homestead property" under this Section includes | 13 | | residential property that is
occupied by its owner or owners | 14 | | as his or their principal dwelling place, or
that is a | 15 | | leasehold interest on which a single family residence is | 16 | | situated,
which is occupied as a residence by a person who has | 17 | | an ownership interest
therein, legal or equitable or as a | 18 | | lessee, and on which the person is
liable for the payment of | 19 | | property taxes. For land improved with
an apartment building | 20 | | owned and operated as a cooperative, the maximum reduction | 21 | | from the equalized
assessed value shall be limited to the | 22 | | increase in the value above the
equalized assessed value of | 23 | | the property for 1977, up to
the maximum reduction set forth | 24 | | above, multiplied by the number of apartments
or units | 25 | | occupied by a person or persons who is liable, by contract with | 26 | | the
owner or owners of record, for paying property taxes on the |
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| 1 | | property and is an
owner of record of a legal or equitable | 2 | | interest in the cooperative
apartment building, other than a | 3 | | leasehold interest. For land improved with a life care | 4 | | facility, the maximum reduction from the value of the | 5 | | property, as equalized by the Department, shall be multiplied | 6 | | by the number of apartments or units occupied by a person or | 7 | | persons, irrespective of any legal, equitable, or leasehold | 8 | | interest in the facility, who are liable, under a life care | 9 | | contract with the owner or owners of record of the facility, | 10 | | for paying property taxes on the property. For purposes of | 11 | | this
Section, the term "life care facility" has the meaning | 12 | | stated in Section
15-170.
| 13 | | "Household", as used in this Section,
means the owner, the | 14 | | spouse of the owner, and all persons using
the
residence of the | 15 | | owner as their principal place of residence.
| 16 | | "Household income", as used in this Section,
means the | 17 | | combined income of the members of a household
for the calendar | 18 | | year preceding the taxable year.
| 19 | | "Income", as used in this Section,
has the same meaning as | 20 | | provided in Section 3.07 of the Senior
Citizens
and Persons | 21 | | with 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 | 24 | | homestead exemption has been granted, the
cooperative | 25 | | association or the management of the cooperative or life care | 26 | | facility shall credit the savings
resulting from that |
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| 1 | | exemption only to the apportioned tax liability of the
owner | 2 | | or resident who qualified for the exemption. Any person who | 3 | | willfully refuses to so
credit the savings shall be guilty of a | 4 | | Class B misdemeanor.
| 5 | | (h) Where married persons maintain and reside in separate | 6 | | residences qualifying
as homestead property, each residence | 7 | | shall receive 50% of the total reduction
in equalized assessed | 8 | | valuation provided by this Section.
| 9 | | (i) In all counties, the assessor
or chief county | 10 | | assessment officer may determine the
eligibility of | 11 | | residential property to receive the homestead exemption and | 12 | | the amount of the exemption by
application, visual inspection, | 13 | | questionnaire or other reasonable methods. The
determination | 14 | | shall be made in accordance with guidelines established by the
| 15 | | Department, provided that the taxpayer applying for an | 16 | | additional general exemption under this Section shall submit | 17 | | to the chief county assessment officer an application with an | 18 | | affidavit of the applicant's total household income, age, | 19 | | marital status (and, if married, the name and address of the | 20 | | applicant's spouse, if known), and principal dwelling place of | 21 | | members of the household on January 1 of the taxable year. The | 22 | | Department shall issue guidelines establishing a method for | 23 | | verifying the accuracy of the affidavits filed by applicants | 24 | | under this paragraph. The applications shall be clearly marked | 25 | | as applications for the Additional General Homestead | 26 | | Exemption.
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| 1 | | (i-5) This subsection (i-5) applies to counties with | 2 | | 3,000,000 or more inhabitants. In the event of a sale of
| 3 | | homestead property, the homestead exemption shall remain in | 4 | | effect for the remainder of the assessment year of the sale. | 5 | | Upon receipt of a transfer declaration transmitted by the | 6 | | recorder pursuant to Section 40 of the Conveyances Act Section | 7 | | 31-30 of the Real Estate Transfer Tax Law for property | 8 | | receiving an exemption under this Section, the assessor shall | 9 | | mail a notice and forms to the new owner of the property | 10 | | providing information pertaining to the rules and applicable | 11 | | filing periods for applying or reapplying for homestead | 12 | | exemptions under this Code for which the property may be | 13 | | eligible. If the new owner fails to apply or reapply for a | 14 | | homestead exemption during the applicable filing period or the | 15 | | property no longer qualifies for an existing homestead | 16 | | exemption, the assessor shall cancel such exemption for any | 17 | | ensuing assessment year. | 18 | | (j) In counties with fewer than 3,000,000 inhabitants, in | 19 | | the event of a sale
of
homestead property the homestead | 20 | | exemption shall remain in effect for the
remainder of the | 21 | | assessment year of the sale. The assessor or chief county
| 22 | | assessment officer may require the new
owner of the property | 23 | | to apply for the homestead exemption for the following
| 24 | | assessment year.
| 25 | | (k) Notwithstanding Sections 6 and 8 of the State Mandates | 26 | | Act, no reimbursement by the State is required for the |
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| 1 | | implementation of any mandate created by this Section.
| 2 | | (l) The changes made to this Section by this amendatory | 3 | | Act of the 100th General Assembly are effective for the 2018 | 4 | | tax 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 | 8 | | monitor the
quality of local assessments by designing, | 9 | | preparing and using ratio studies,
and shall use the results | 10 | | as the basis for equalization decisions. In
compiling sales | 11 | | ratio studies, the Department shall exclude from the reported
| 12 | | sales price of any property any amounts included for personal | 13 | | property and,
for sales occurring through December 31, 1999, | 14 | | shall exclude
seller paid points. The Department shall not | 15 | | include in its sales ratio
studies sales of property which | 16 | | have been platted and for which an increase in
the assessed | 17 | | valuation is restricted by Section 10-30.
The Department shall | 18 | | not include in its sales ratio studies the initial sale
of | 19 | | residential property that has been converted to condominium | 20 | | property. The Department shall include compulsory sales | 21 | | occurring on or after January 1, 2011 in its sales ratio | 22 | | studies. The Department shall also consider whether the | 23 | | compulsory sale would otherwise be considered an arm's length | 24 | | transaction, based on existing sales ratio study standards.
| 25 | | When the declaration
required under Section 40 of the |
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| 1 | | Conveyances Act the Real Estate Transfer Tax Law contains | 2 | | financing information
required under Section 31-25 , the | 3 | | Department shall adjust sales prices to
exclude seller-paid | 4 | | points and shall adjust sales prices to "cash value" when
| 5 | | seller related financing is used that is different than the | 6 | | prevailing cost of
cash. The prevailing cost of cash for sales | 7 | | occurring on or after January 1,
1992 shall be established as | 8 | | the monthly average 30-year fixed Primary Mortgage
Market | 9 | | Survey rate for the North Central Region as published weekly | 10 | | by the
Federal Home Loan Mortgage Corporation, as computed by | 11 | | the Department, or such
other rate as determined by the | 12 | | Department. This rate shall be known as the
survey rate. For | 13 | | sales occurring on or after January 1, 1992, through
December | 14 | | 31, 1999, adjustments in
the prevailing cost of cash shall be | 15 | | made only after the survey rate has been
at or above 13% for 12 | 16 | | consecutive months and will continue until the survey
rate has | 17 | | been below 13% for 12 consecutive months.
For sales occurring | 18 | | on or after January 1, 2000, adjustments for seller paid
| 19 | | points and adjustments in the prevailing cost of cash shall be | 20 | | made only after
the survey rate has been at or above 13% for 12 | 21 | | consecutive months and will
continue until the survey rate has | 22 | | been below 13% for 12 consecutive months. The Department shall | 23 | | make
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 | 2 | | Article 31. | 3 | | Section 15. The Conveyances Act is amended by adding | 4 | | Sections 40 and 41 as follows: | 5 | | (765 ILCS 5/40 new) | 6 | | Sec. 40. Transfer declaration. At the time a deed, a | 7 | | document transferring a controlling interest in real property, | 8 | | or trust document is presented for recordation, or within 3 | 9 | | business days after the transfer is effected, whichever is | 10 | | earlier, there shall also be presented to the recorder or | 11 | | registrar of titles a declaration, signed by at least one of | 12 | | the sellers and also signed by at least one of the buyers in | 13 | | the transaction or by the attorneys or agents for the sellers | 14 | | or buyers. The declaration shall state information including, | 15 | | but not limited to: (1) the value of the real property or | 16 | | beneficial interest in real property located in Illinois so | 17 | | transferred; (2) the parcel identifying number of the | 18 | | property; (3) the legal description of the property; (4) the | 19 | | date of the deed, the date the transfer was effected, or the | 20 | | date of the trust document; (5) the type of deed, transfer, or | 21 | | trust document; (6) the address of the property; (7) the type | 22 | | of improvement, if any, on the property; (8) information as to | 23 | | whether the transfer is between related individuals or | 24 | | corporate affiliates or is a compulsory transaction; (9) the |
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| 1 | | lot size or acreage; (10) the value of personal property sold | 2 | | with the real estate; (11) the year the contract was initiated | 3 | | if an installment sale; (12) any homestead exemptions, as | 4 | | provided in Sections 15-170, 15-172, 15-175, and 15-176 of the | 5 | | Property Tax Code as reflected on the most recent annual tax | 6 | | bill; (13) the name, address, and telephone number of the | 7 | | person preparing the declaration; and (14) whether the | 8 | | transfer is pursuant to compulsory sale. Except as provided in | 9 | | Section 41, a deed, a document transferring a controlling | 10 | | interest in real property, or trust document shall not be | 11 | | accepted for recordation unless it is accompanied by a | 12 | | declaration containing all the information requested in the | 13 | | declaration. When the declaration is signed by an attorney or | 14 | | agent on behalf of sellers or buyers who have the power of | 15 | | direction to deal with the title to the real estate under a | 16 | | land trust agreement, the trustee being the mere repository of | 17 | | record legal title with a duty of conveying the real estate | 18 | | only when and if directed in writing by the beneficiary or | 19 | | beneficiaries having the power of direction, the attorneys or | 20 | | agents executing the declaration on behalf of the sellers or | 21 | | buyers need identify only the land trust that is the | 22 | | repository of record legal title and not the beneficiary or | 23 | | beneficiaries having the power of direction under the land | 24 | | trust agreement. The declaration form shall be prescribed by | 25 | | the Department of Revenue and shall contain sales information | 26 | | questions. The subject of the financing questions shall |
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| 1 | | include any direct seller participation in the financing of | 2 | | the sale or information on financing that is unconventional so | 3 | | as 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 | 6 | | documents shall be exempt from the transfer declaration | 7 | | described 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.
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