Property Tax Assessment  Freeze

Rehabilitating your older home is rewarding in many ways, and with the Property Tax Assessment Freeze homeowners may be eligible for a financial incentive that can make the work even more attractive.  The program can freeze the assessed value of historic owner-occupied, principal residences for a period of 8 years, followed by a four-year period during which the property’s assessed value steps up to an amount based upon its current market value.  This results in 12 years of reduced property taxes.  This program is administered free of charge as a benefit to Illinois property owners interested in rehabilitating their historic homes.

Benefits

The Property Tax Assessment Freeze Program benefits both the owner-occupant and the community by:

• Rewarding owner-occupants for sensitively reinvesting in their homes
• Increasing the value of the rehabilitated property;
• Strengthening neighborhoods and housing within a community
• Encouraging landmark protection through the promotion, recognition, and designation of historic structures;

Provisions

If a rehabilitation meets all four provisions described below, the Illinois Historic Preservation Agency (IHPA) will issue a Certificate of Rehabilitation for the property.  This Certificate allows your assessor to implement the assessment freeze for your property.  To qualify for the Property Tax Assessment Freeze, a property must:

1. Be owner-occupied housing and the principal residence of the owner:
1. Single-family houses
2. Residential buildings with up to six units as long as the building owner resides in one of the units
3. condominium buildings
4. cooperatives

2. Be a registered historic building.  For this program, a historic building is:

1. individually listed on the National Register of Historic Places in any community in Illinois, or
2. a contributing property within a National Register Historic District in any community in Illinois, or
3. individually listed on the Illinois Register of Historic Places in any community in Illinois, or
4. designated as an individual local landmark in a community that has an approved preservation ordinance, or
5. a contributing property within a local historic district in a community that has an approved preservation ordinance

For letters d and e above, the cities and counties with ordinances approved for the assessment freeze program (as of February, 2013) are: Aurora, Belleville, Bloomington, Blue Island, Carbondale, Centralia, Charleston, Chicago, DeKalb, Elgin, Elmhurst, Evanston, Geneva, Glen Ellyn, Glencoe, Glenview, Highland Park, Hinsdale, Jacksonville, Joliet, Kane County, Lake Bluff, Lemont, Lockport, Lombard, Marengo, McHenry County, Morrison, Mount Carroll, Normal, Oak Park, O’Fallon, Orland Park, Oswego, Peoria, Quincy, River Forest, Rock Island, Rockford, St. Charles, Springfield, Washington, West Chicago, Will County, Wilmette, Winnetka, and Woodstock.

If you are uncertain whether your home has been designated a historic building:

• contact your local landmark commission (http://www.illinoishistory.gov/ps/clgs.pdf).
• or, if you are a resident of the City of Chicago you can check your historic status online at the City's Zoning Map at https://gisapps.cityofchicago.org/zoning/. However, you will need to go to the right sidebar, click the zoning tab, and then check the bottom field for the legend: "National Register of Historic Places & National Historic Landmarks" to get complete results.
• or, you can contact the IHPA National Register staff at 217-785-4324 to determine if your property is a registered historic structure. For all other tax freeze application, policy, or procedures please feel free to contact the Tax Credit Coordinator at 217-524-0276.

3. Be rehabilitated in accordance with the Secretary of the Interior's Standards for Rehabilitation.”

4. Undergo a substantial rehabilitation with a budget whose eligible expenses equal or exceed 25% of the property's fair cash value, as determined by the local assessor, for the year the rehabilitation started.  Eligible expenses are those costs spent on the existing building (see the FAQ's for more information).

Certification Procedure

Step 1: Contact us early to see if you qualify:

• Determine if you have a registered historic structure (See Provision 2 above).
• Determine the assessed value and market value (or fair cash value) of your property by contacting your assessor or by referring to your current property tax bill.  
• Decide whether the work you have in mind will cost more than 25% (or ¼) of your property’s fair cash value.
• Feel free to contact IHPA to discuss whether your proposed work may meet the Secretary of the Interior's Standards for Rehabilitation at 217-524-0276. We highly recommend you submit Part 2 (rehabilitation description plans) prior to beginning work and early in the design process.

Step 2: Review the following documents:

• Click here for the Microsoft Word version of the Certificate of Rehabilitation Application and application guidelines.  Click here for the Adobe pdf version. 
• Click here for Frequently Asked Questions regarding the Property Tax Assessment Freeze Program.  This information is contained in the downloadable Application.
• Click here for a Guide to Completing the Certificate of Rehabilitation Application.  This information is contained in the downloadable Application.
• Review the Secretary of the Interior’s “Standards for Rehabilitation” and “Guidelines for Rehabilitating Historic Buildings.”
• Click here for of Illinois Administrative Code regarding Tax Incentives for Rehabilitate Owner-occupied Historic Residences (in Adobe Acrobat).
• Click here for the Revenue Property Tax Code Statute (35 ILCS 200/)regarding the Property Tax Freeze Program.

Step 3: Fill out and submit Part 1 and Part 2 of the Application:

• Plans, photographs, and a narrative of the proposed work, in addition to the Application form itself, allow IHPA to determine if your entire project meets the Secretary of Interior’s “Standards for Rehabilitation."
• To count your own labor towards meeting your minimum expenditure, use the Do-It-Yourself Labor Report form, available as a Microsoft Word document or an Acrobat pdf document.
• If you need additional description sheets for the Part 2, click here to download three additional sheets in Microsoft Word, or click here to download three additional sheets in Acrobat pdf.
• If you have any questions after reading the FAQs and the Guide to Completing the Certificate of Rehabilitation Application, please contact us at 217-524-0276.
• Once your preliminary plans are approved, proceed with the rehabilitation project.
• Contact us if there are changes made to the rehabilitation plans during the course of the project.

Step 4: Request final approval – fill out Part 3 of the Application:

• When the project is completed, send us a new set of photographs showing the completed work and documentation proving that 25% of the property’s market value was spent on rehabilitating the existing building.
• Within 45 days of receipt of the complete and correctly drafted application, we will determine if the project meets all the program requirements, including the guidelines established by the Secretary of Interior’s “Standards.”  If the project is approved, a Certificate of Rehabilitation will be issued.
• We will send a Certificate of Rehabilitation to your local assessor and to the property owner. The assessor then makes the necessary adjustments.

Special Conditions

• Applications for the Certificate must be submitted within two years of project completion.  
• If the property is sold within the eight-year freeze period, of if its use changes from that of a single-family owner-occupied principal residence, the Certification will be cancelled for the remainder of the freeze period.
• Subsequent rehabilitation work must also meet the “Standards” or the Certificate will be cancelled for the remainder of the freeze period.
• The property owner is required to file an affidavit with the assessor each year verifying ownership and use.  
• See the FAQs and the Guide to Completing the Certificate of Rehabilitation Application for more information.

Opt Out Provision

Any taxing district may “opt out” of the Property Tax Assessment Freeze Program by notifying the assessor and the county clerk at the beginning of each calendar year.  The Property Tax Assessment Freeze will not apply then to taxes levied by that taxing district.  To determine whether any taxing districts in your area have opted out, contact your assessor or county clerk.  Properties that have already received Certificates, or where rehabilitation has already begun, will not be affected by a taxing district's “opt out.”