Sunday, February 13, 2011

New Law Requires Seniors to Re-apply Annually for Senior Citizen Exemption and Affects Home-Buyers in Some Cases

CHICAGO, February 14, 2011- Cook County Assessor Joseph Berrios was joined by city and county officials on Monday to announce a massive mailing targeted at Senior Citizen homeowners who must now re-apply to receive an annual reduction in their property taxes.

"It's critical in the coming days that seniors watch for the Senior Citizen Exemption application in the mail," Assessor Berrios said. "They will owe more on their property tax bills if they fail to fill out this very important application. I don't want anyone to miss out on their right to save money."

A new Illinois law requires that seniors re-apply for the Senior Citizen Exemption. On February 7, the Assessor's office mailed out nearly 300,000 applications containing both the Senior Citizen and Senior Freeze Exemptions to taxpayers who received a senior exemption last year.

"My top priority during this legislative session will be getting this unfair law overturned," Assessor Berrios said. "I don't want seniors to run the risk of forgetting to fill out the application and seeing a tremendous increase on their second-installment tax bills."

Berrios did stress however that seniors must reapply for the Senior Citizen Exemption this year in order to receive the exemption savings on their tax bills. He also said that his office would be hosting numerous senior outreach meetings to make seniors aware of the new annual application requirement.

It is important to keep in mind that this new law affects more than seniors. Recent home-buyers may be shocked to find a large increase in their tax bill because often-times it is up to the seller to apply for the exemption.

Chicago attorney Bob Nolan said several of his clients experienced this problem this year and said it's unlike anything he's seen in his 30-year career.

"Often the seller doesn't know about re-applying. Sometimes the home is in a trust and the family didn't fill out the application. And sometimes they just don't care since it is not their problem anymore," Nolan said.

As for recourse, Nolan said dealing with the Assessor's office is often a long and frustrating experience. He added that while the tax increase is relatively sizable at a couple thousand dollars or more, it often isn't enough to sue anyone over.

"The best thing to do is to get a copy of the seller's tax bill and if you see a senior freeze or senior exemption, talk to your lawyer to negotiate."

Local political watchdog and freelance investigative reporter David Jenkins said that the change is not shocking to him.

"Politicians seem to like it when it's more confusing. Maybe they can get away with more things," Jenkins said. He added that it is very important to work with Realtors, lenders and attorneys who are aware of how things work and take the additional step of asking questions.

"Check with the assessor's office. They have a list of the specific dollar amounts for each exemption," Jenkins said. "That often reduces the shell-shock."

Oak Park resident Mike Peters was one of the many people shocked by the increase in taxes after buying his first home in 2009.

"For us, it was a perfect storm of things. We were re-assessed and the seller failed to apply for their exemption," Peters said, adding that he and his wife's tax escrow bills will higher than their mortgage payment for first two years after they bought their home.

Now, after filing amendments and getting refunds, Peters said their tax bill has balanced out.

"Be vigilant (when you buy a home) and ask a lot of questions," Peters said.

The Senior Citizen Exemption provides tax relief by reducing the equalized assessed valuation of an eligible residence. This savings is in the form of a deduction on the second-installment property tax bill. Seniors receiving the Senior Citizen Exemption automatically qualify for the Homeowner Exemption, and do not have to apply for it separately.

Seniors who do not receive applications in the mail but believe they are entitled to the exemption, may download a form by visiting They can also call (312) 443-7550.

To reach as many people as possible, the Assessor's office is being assisted in senior outreach by the City of Chicago. The City will have the applications available at its six senior regional centers throughout the city.

"Seniors have worked hard all their lives and should receive all the tax relief they deserve. Senior property owners in Chicago should call 3-1-1 to make sure they are receiving all their exemptions and receive assistance if they do not have all their exemptions," Mayor Richard M. Daley said in a press release.

Many elected officials joined the Assessor Monday to voice their concerns about the new annual application requirement.

"It is important for seniors to re-apply for their exemptions so that they do not miss out in the savings that are due to them. It is unfortunate that it is necessary to send these notices to our senior citizens each year, and I look forward to the General Assembly passing legislation that will make this process less confusing and more convenient," Cook County Commissioner Elizabeth Gorman said.

To qualify for the Senior Citizen Exemption for the taxable year 2010, the property owner must have:

· Been born prior to or in the year 1945,

· Owned the property, or have a lease or contract which makes them responsible for the real estate taxes, and

· Used the property as a principal place of residence.

In addition to the Senior Citizen Exemption, seniors on limited incomes may also qualify for the Senior Freeze Exemption. This exemption freezes the equalized assessed value of their property. To qualify for the Senior Freeze Exemption for the taxable year 2010 taxpayers must have:

· Been born prior to or in the year 1945,

· A total household income of $55,000 or less for income tax year 2009,

· Owned the property or had a legal, equitable or leasehold interest in the property on January 1, 2009 and January 1, 2010,

· Used the property as a principal place of residence as of January 1, 2009 and January 1, 2010, and

· Been liable for the payment of 2009 and 2010 property taxes.

Annual application is also required for the Senior Freeze Exemption.

Eligible seniors who have never applied for the senior exemptions in the past may visit the Assessor's Web site and download an application or contact the Assessor's Office and request a form be mailed to them.

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