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.
1. Calculate 2002 Base EAV |
|
|
2002 Assessed Value |
|
16,000 |
2002 Equalizer |
|
X 2.4689 |
2002 EAV |
|
39,502 |
Homeowner Exemption |
|
- 4,500 |
2002 Base EAV |
|
35,002 |
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.
2. Calculate 2006 Adjusted Base EAV |
|
2002 Base EAV |
|
35,002 |
Increase with 7% |
|
X 1.07 |
2003 Adjusted Base EAV |
|
37,453 |
Increase with 7% |
|
X 1.07 |
2004 Adjusted Base EAV |
|
40,074 |
Increase with 7% |
|
X 1.07 |
2005 Adjusted Base EAV |
|
42,879 |
Increase with 7% |
|
X 1.07 |
2006 Adjusted Base EAV |
|
45,881 |
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.
3. Calculate 7% Expanded Homeowner Exemption |
2006 Assessed Value |
|
30,456 |
2006 Equalizer |
|
X 2.7076 |
2006 EAV |
|
82,463 |
2006 Adjusted Base EAV |
|
- 45,881 |
7% Expanded Exemption |
|
36,582 |
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).
