How long has the 7% Expanded Homeowner Exemption been available?

Cook County is divided into three districts for reassessment purposes-- the City of Chicago, the north suburbs, and the south suburbs.  The 7% Expanded Homeowner Exemption (EHE) was signed into law in July of 2004 and went into effect during each district’s reassessment.  It was first applied to the City of Chicago for tax year 2003, to the north suburbs in 2004 and to the south suburbs in 2005.  The 7% EHE was renewed in October of 2007 and will be in place for one more assessment cycle for each district.  The current legislation will apply through 2008 for Chicago, 2009 for the north suburbs, and 2010 for the south suburbs.

Does the 7% Expanded Homeowner Exemption stop my taxes from increasing? 

No.   The 7% Expanded Homeowner Exemption (EHE) just ensures that the taxable value of most homes will not increase by more than 7% each year.  This 7% annual increase will lead to tax increases for some homeowners, depending on the other elements that factor into determining a property tax bill, such as the state multiplier and the tax rate, which change each year.  It is important to note that many homeowners do see a decrease in their tax bills with the expanded exemption and homeowners typically have lower tax bills with the 7% EHE in place than they would have without it.

When and how do I become eligible for the 7% Expanded Homeowner Exemption? 

The 7% Expanded Homeowner Exemption (EHE) is available to all homes that receive the Homeowner Exemption.  In order to receive the Homeowner Exemption, the home must be owner-occupied and used as a principal place of residence. Homeowners must also be liable for payment of the property taxes. Types of eligible properties include: single-family homes, condominiums, cooperatives, and apartment buildings with up to and including six units.  A homeowner will experience relief from the 7% EHE on second installment tax bills.

Has the 7% Expanded Homeowner Exemption been passed?

Yes.  The 7% Expanded Homeowner Exemption was renewed in October of 2007 and will be in place for an additional assessment cycle for each district.  The current legislation will expire in 2008 for Chicago, 2009 for the north suburbs, and 2010 for the south suburbs.

What has changed in the new legislation?

The basic components of the 7% Expanded Homeowner Exemption will remain the same.   However, there are some important differences. Under the previous law, the maximum homeowner exemption was 20,000.  Under the new law, the maximum exemption amount changes in each year.

• 33,000 in the first year

• 26,000 in the second year

• 20,000 in the third year

However, there is a special provision for 2006.  For this year in the City of Chicago only, the exemption limits are as follows:

• % increase in full EAV from 2002 to 2006 <80%

• Exemption Limit= 33,000

• % increase in full EAV from 2002 to 2006 <80% and <100%

• Exemption Limit= 35,000

• % increase in full EAV from 2002 to 2006 >100%

• Exemption Limit= 40,000

It is important to remember that the 20,000 maximum exemption is still in place for the North suburbs through tax year 2006, and for the South suburbs through tax year 2007.

How do you calculate the 7% Expanded Homeowner Exemption?

You can see the calculation of your 7% Expanded Homeowner Exemption on this website (www.cookcountyassessor.com).

The 7% Expanded Homeowner Exemption affect my tax bill in dollars?

The 7% Expanded Homeowner Exemption leads to a reduction in the taxable value of a property through an expanded homeowner exemption. The tax dollar value of the homeowner exemption can be viewed on the second installment tax bill.  This tax dollar value is determined by multiplying the amount of the exemption by the tax rate.

Why is my proposed assessment so high for 2007?  I thought it could only go up by 7%?

Assessment values are based on increases in the real market value of your home over the course of a three year reassessment cycle.  Given the recent real estate market, residential properties have experienced rapid increases in assessed values in the last few reassessments.  The 7% Expanded Homeowner Exemption (EHE) was developed to mitigate these high assessment increases by limiting the annual increases in the taxable value of a homeowner’s property to 7% through an increase in the amount of the homeowner exemption.  Therefore, even if your proposed assessment increases by more than 7%, the increase in the taxable value of your home will be limited through the 7% EHE.  If you believe that the assessed value of your property is incorrect you should file an assessment appeal.

Why don’t I see a savings with the 7% Expanded Homeowner Exemption with my Senior Freeze exemption?

The Senior Freeze and 7% Expanded Homeowner Exemption (EHE) are administered as separate exemptions.  A homeowner can receive the 7% EHE or the Senior Freeze, not both.  Those eligible for the Senior Freeze will receive greater benefits with this exemption than the 7% EHE, since the EAV of the property is frozen. With the 7% expanded exemption it can increase by 7% each year.

What happens to the 7% Expanded Homeowner Exemption when a property is sold?

When a property that is receiving the 7% Expanded Homeowner Exemption is sold to another homeowner, the expanded exemption remains in place for the year in which the property is sold.  For the next year, the base equalized assessed value (EAV) from which the 7% expanded exemption is calculated is reset and becomes the EAV of the property in the year prior to when it was sold.  Typically this new base EAV will be greater than the old base EAV, resulting in a smaller exemption amount needed to keep the increase in taxable EAV to 7%.  For properties that sell in a non-reassessment year, their homeowner exemption amount typically will not get above 5,000.

How is the 7% Expanded Homeowner Exemption combined with the homeowner exemption?

The 7% Expanded Homeowner Exemption is administered as an expansion of the original Homeowner Exemption. 

How much longer will the 7% Expanded Homeowner Exemption continue?

The 7% Expanded Homeowner Exemption will be in place through 2008 for the City of Chicago, 2009 for the north suburbs and 2010 for the south suburbs.

Do I have to apply for the 7% Expanded Homeowner Exemption or is it an automatic savings?

Because the 7% Expanded Homeowner Exemption is administered as an expansion of the original Homeowner Exemption, homeowners who have received the Homeowner Exemption in the previous year automatically receive the expanded exemption.  If a property is refinanced or placed in a trust taxpayers should alert the Assessor’s Office as reapplication of the exemption may not be automatic.  Residential taxpayers who did not receive the Homeowner Exemption in the last year and who have questions about their eligibility should contact the Assessor's Office at (312) 603-7550 to receive further information.

Do you have any documentation that I can review pertaining to the 7% EHE?

Information, including the full calculation of the homeowner exemption for each property, is available on this Web site, www.cookcountyassessor.com.  

Understanding and Calculating the 7% Expanded Homeowner Exemption

Please Note: It is NOT necessary for a homeowner to calculate his or her exemption amount. The Cook County Assessor’s Office will compute the amount of savings each homeowner receives.

The following example is for a City of Chicago homeowner who has been eligible for and received the 7% Expanded Homeowner Exemption (EHE) since 2003.  The home had a market value of 135,000 in 2003 and after the 2006 reassessment has a market value of 190,000.  The idea of the 7% EHE is to keep increases in taxable value to 7% each year.  Therefore, the first step is to determine the base from which to start calculating the 7% growth in taxable value.  For this homeowner, who has been eligible for the 7% EHE since 2003, their base equalized assessed value (EAV) is calculated as follows.

The 7% EHE aims to keep growth in the taxable EAV to 7% each year.  Therefore, the 2002 Base EAV must be increased by 7% each year.

The 7% expanded exemption is the exemption amount needed to keep the growth in taxable EAV to 7% annually.  It is determined by subtracting the adjusted base EAV from the EAV in that year.

In order to limit the growth of the taxable EAV of this homeowner to 7%, they need a homeowner exemption of 36,582.  It is important to remember that the exemption can fall anywhere in between the minimum (5,000) and maximum exemption value (which varies by assessment district by year).

A full calculation for your property may be found on this Web site   (www.cookcountyassessor.com).

Cook County Assessor James M. Houlihan