Property Tax Assessment Freeze Frequently Asked Questions

Is there a cost to apply to or participate in the assessment freeze program?  No, this program is administered free of charge as a benefit to Illinois property owners interested in rehabilitating their historic homes.

Does this program freeze my property taxes?  No, it freezes your Assessed Value at the amount it was in the year your rehabilitation started.  The assessed value is the amount that determines your payable taxes.  You are still subject to multipliers and fluctuating tax rates throughout the freeze period.

Can I sell my house during the freeze period?  Yes.  Selling a residence that has the assessment freeze does not encumber the sale in any way, but the existing assessment freeze does not transfer to the subsequent owner-occupant.  If the property sells or if it changes from residential use to commercial use, the assessment freeze will be cancelled for the remainder of the freeze period.  When the property sells, the assessed value and the fair market value are revised to their current level.  If the new owner-occupant desires, s/he can immediately apply for a new assessment freeze if s/he meets the program criteria and spends more than 25% of the revised fair market value on a new rehabilitation project. 

Can I apply for the assessment freeze more than once?  Yes, but the same owner-occupant must wait 4 years after the end of the 12-year assessment freeze period before applying again for the same residence.  If the same owner-occupant in the same property applies for the assessment freeze after that 4-year waiting period, s/he must spend more than 25% of the current fair market value on a new rehabilitation project.  If that same owner-occupant moves to a different property, s/he can immediately apply for an assessment freeze for the new property.

Can I act as a developer and “flip” a house?  Yes.  A person or a company can purchase a residence, receive approval on the Part 1 and Part 2 of the Application, and perform the rehabilitation but not move into the property.  When the residence is sold, if the new owner submits the Part 3 of the Application and receives approval, then s/he receives the assessment freeze on the property.

What are the Standards?  The Secretary of the Interior has written 10 principles that advise how to improve or alter historic structures without sacrificing those elements that make them significant.  The word used to describe this kind of work is “rehabilitation.”  These 10 Standards specifically refer to the rehabilitation of historic structures (as opposed to the restoration or the reconstruction of them).  Though the Standards themselves are broadly written, the National Park Service has refined their interpretation over the last 30 years in thousands of projects across the country.  IHPA will use these 10 Standards and this specific interpretation to review your Application.  Click here for more information on the Standards.

How much do I need to spend on my rehabilitation project?  Your minimum expenditure is at least 25% of your property’s “fair cash value” (or “market value”), as determined by your assessor.  This program uses the “fair cash value” and not the “assessed value” to calculate your minimum expenditure.  This figure can usually be found on your tax bill or by calling your township or county assessor’s office.  Some assessors make this information available on their websites.  As an example, if you began your project in 2007 and the assessor’s fair market value in 2007 was $290,850, then your minimum expenditure is 25% (or ¼) of that number, which is $72,712.50.  There is no maximum expenditure. 

How long do I have to complete my rehab project?  Ordinarily, you have 24 months to meet or exceed your minimum expenditure with eligible expenses.  You must submit an Application within two years of the project’s completion.  IHPA can give an extension when a project warrants it (i.e. major changes in scope or finances, family emergencies), if a written request and explanation are made by the owner.

What are eligible expenses?  Costs incurred by the property owner in the rehabilitation of the existing building.  They include, but are not limited to, roof replacement, masonry repointing, wood refinishing, painting, electrical and mechanical systems upgrades, work done to existing additions (even if they are not historic), kitchen and bathroom improvements and architectural fees.  Reconstruction of missing historic features (i.e., porch, cornice) can be eligible expenses provided that the reconstruction is based upon historical or physical documentation.  If the sum of eligible expenses exceeds your minimum expenditure, then you have spent enough to trigger the freeze. Work paid for by grant money and insurance pay-outs (i.e., after a disaster) can be counted towards meeting your minimum expenditure.

What are ineligible expenses?  Costs incurred by construction outside the existing building, including landscaping, patios, decks, the construction of new additions, driveways, and plant material.  These expenses cannot be counted towards meeting your minimum expenditure.

How do I document my expenses?  By submitting copies of any of the following: receipts, cancelled checks, paid bills, and contractors’ liens.  A spreadsheet or summary of work and costs is helpful.

What if my project has already started or is completed?  You are not disqualified from applying if construction has already started or is completed.  But we strongly recommend applying before construction begins in order to avoid jeopardizing your Application.  Owners applying during or after project completion must be able to document the property’s pre-rehabilitation condition.  All work, both eligible and ineligible expenses, must meet the Standards.

What if there is additional work to be done in the future?  All work done during the 12 years of the freeze program must be submitted for IHPA to review to ensure that it meets the Standards.  Any additional work must be described in your Application or submitted at a later date for our review and approval prior to initiating work.  If additional work occurs during the period of the freeze and that work is not approved as meeting the Standards, your freeze will be cancelled for the remainder of the freeze period.

What parts of the project does IHPA review?  We review the entire project, exterior and interior, eligible and ineligible expenses, to ensure the Standards have been met.

Can I build an addition to my house?  Yes.  The addition will be reviewed for compliance with the Standards.  But the cost of the addition is considered an ineligible expense and cannot be counted towards meeting your minimum expenditure.

Can my own labor count as an eligible expense?  Yes, as long as you document your work hours using the “Do-It-Yourself Labor Report”, available as a Microsoft Word document or an Acrobat pdf document.  The allowable hourly rate is the federal minimum wage ($7.25/hr, effective 7/24/09).  If you are a professional, you can charge your professional rate for work done in your profession (example: if you are a plumber by trade, you can claim your professional rate for all plumbing work on your project but not for plastering or roofing).  A letter certifying your hourly rate must accompany the form.

How long does it take for IHPA to review my application?  IHPA reviewers must respond to a submission with 45 days.  Normally, our reviews are handled in a much shorter amount of time.  Feel free to contact us to check on the status of your application (217-785-5042).

How are Certificates issued for multi-unit properties?  For multi-unit properties, the work on the entire building, not just on each unit, must meet the Standards.  Individual condo units are eligible to receive a Certificate of Rehabilitation.  For cooperative buildings, one Certificate will be issued for the building as a whole.  For residential buildings with up to six units as long as the building owner resides in one of the units, a single Certificate will be issued for the building as a whole.  Contact Mike Ward at IHPA (217-785-5042) to discuss how your multi-unit project can best apply for the assessment freeze.

Are there other requirements that have to be met during the freeze period?  Each year, the assessor will send you an affidavit to complete verifying that you are the owner occupant of the single-family residence.  If you do not return the affidavit, your assessment freeze will be cancelled for the remainder of the freeze period.