There are so many expenses that come along with being a homeowner. From closing costs to annual maintenance expenses, you will inevitably spend money. That is why when there is an opportunity to save money, you should consider all your options. This month’s article will introduce cost savings through the form of Exemptions. Some folk know about them but many do not. Hopefully you will find this information helpful and share the word as well.
What is an exemption exactly? An exemption is a method by which part of the value of your property is removed from taxation which in turn lowers your taxes. For example, if your house is valued at $100,000 and you qualify for a $20,000 exemption, you will only be responsible for paying taxes on your home at a value of $80,000; $20,000 is therefore being exempt (or removed) from your property tax payment obligation. There are several types of exemptions that homeowners can look into. The first is the Homeowner Exemption. If you own a home and you live in it as your primary residence, then you are likely eligible for a homeowner tax exemption. Also known as a homestead exemption, owners of single-family homes, townhouses, condominiums, co-ops or apartment buildings (up to six units) that are listed as their primary residence can save anywhere between $250 to $2,000 per year, depending local tax rates and assessment increases. How can I find out if I’m eligible? Its quite simple actually. All you have to do is visit your local county assessor’s office, fill out the application which will require you to declare that the property you are requesting exemption on is in fact your primary residence, submit and await approval. Please be advised that if you own more than one home, you are only eligible to file an exemption on one; that being your primary residence. Once you (a homeowner) are granted an exemption, it will remain in effect until you (the homeowner) are no longer eligible to receive such benefits; i.e., you move and the residence is no longer owned or occupied by you as the principal place of residence. Additionally, in the event property changes ownership (i.e. deed transfer – check out the August 2014 titled Simple InDEED) this will automatically terminate the exemption for the upcoming fiscal year. You will need to then re-apply. Different counties around the country offer different exemption programs. For example, in Chicago Illinois under the county of Cook, there are options for seniors called the Senior Citizen Homestead Exemption, where folks over the age of 65 can receive additional tax savings, especially when combined with the homestead exemption. There is also the Senior Citizen Assessment Freeze Exemption where qualified senior citizens can “apply for a freeze of the assessed value of their property. Over time, in many areas, this program results in taxes changing minimally and often decreasing as surrounding properties continue to rise in assessed value. This is the most valuable homeowner exemption program. The value increases over the years as it eliminates the impact of regular reassessment increases that may occur every three years”. Then there is the Home Improvement Exemption. According to Cook County Assessor’s Office, Homeowners can make up to $75,000 worth of property improvements without an increase in property taxes for at least four years. The value varies depending on the reduction of the assessed value and the tax rates where the property is located. If you’re like me, then you can appreciate most opportunities that allow you to keep a few extra dollars in your pocket. In this case, if you are a homeowner (current or future), then do yourself a favor and consider this very important tax savings. Don't worry, you can thank me laterJ! Till Next Time, Happy Living and Learning Solonge – Member of the S.P. Team
3 Comments
Zara
11/4/2014 02:57:28 am
Great tip!! Thanks
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Brittany
11/4/2014 04:11:01 am
This is a great article sis!!!
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Kelly
11/10/2014 02:19:51 am
Never considered this, but I will be checking to see if I'm eligible.
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About The AuthorSolonge Robinson is a Co-Founder of Soldon Properties, LLC and proud contributor to The Soldon Corner. Archives
January 2020
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