Public Act 98-0093 (IL)


Public Act 98-93 (SB 41); Effective Date: 7/16/2013


Statutes Amended: 35 ILCS 200/9-275 (new); 35 ILCS 200/20-15


The Illinois legislature, under the state constitution, is authorized to grant tax breaks for homes. Ill. Const. Art. IX, § 6. The basic policy behind this constitutional provision is to provide tax relief for needy homeowners who might lose their homes due to high property taxes. Chicagoland Chamber of Commerce v Pappas, 378 Ill. App. 3d 334, 880 N.E.2d 1105 (Ill. App. Ct. 2007); McKenzie v. Johnson, 98 Ill. 2d 87, 456 N.E.2d 73 (Ill. 1983). Accordingly, various statutes have been enacted to provide them with homestead exemptions, including a general homestead exemption (35 ILCS 200/15-175), an alternative general homestead exemption (35 ILCS 200/15-176), and additional exemptions for senior citizens (35 ILCS 200/15-170), returning veterans (35 ILCS 200/15-167), disabled persons (35 ILCS 200/15-168), among others.


Recently, however, non-compliance with these laws has become problematic. For instance, Cook County assessor’s office remarked that a significant portion of its annual loss of $65 million is attributable to granting tax exemptions to homeowners for more than they deserve.[1] After lengthy discussion, the General Assembly unanimously passed a bill penalizing those who abuse the homestead exemption.[2] The law only affects Cook County property owners. Taking effect immediately, the new law can impose a penalty of 50% of the total amount of unpaid taxes due to homestead exemptions that the taxpayer improperly received. 35 ILCS 200/9-275(f).


The statute begins with the definition of “erroneous homestead exemption,” which would be the target for which to impose the penalty. 35 ILCS 200/9-275(a). It is defined as “a homestead exemption that was granted for real property in a taxable year if the property was not eligible for that exemption in that taxable year.” Id. Homestead exemptions covered in the definition are exemptions under Sections 15-165 (disabled veterans), 15-167 (returning veterans), 15-168 (disabled persons), 15-169 (disabled veterans standard homestead), 15-170 (senior citizens), 15-172 (senior citizens assessment freeze), 15-175 (general homestead), 15-176 (alternative general homestead), and 15-177 (long-time occupant). Id.


The statute then provides certain procedural steps to be followed. First, in an assessment notice sent out each year, the Cook County assessment officer must include (1) a list of each homestead exemption available under the law as well as a description of the eligibility criteria for that exemption, (2) a list of each homestead exemption applied to the property, (3) information on penalties and interest that could be incurred for erroneous homestead exemptions, and (4) the availability of 60-day grace period. 35 ILCS 200/9-275(b). New provisions have been added to 35 ILCS 200/20-15 as well, requiring that a statement on a tax bill include “the statutory amount of each homestead exemption applied to the property” and “the assessment value of the property after application of all homestead exemptions.” 35 ILCS 200/20-15(e)(3)–(4).


Next, the statute authorizes the Cook County assessment officer to record a tax lien on the property that received erroneous homestead exemptions. 35 ILCS 200/9-275(c). Before recording the lien, however, the notice of intent to record a lien must be served upon the taxpayer. Id. Among the contents required to be included in the notice, there is a form that the taxpayer can use to request a hearing. 35 ILCS 200/9-275(d). If the taxpayer properly requests a hearing, the lien cannot be imposed until the conclusion of the hearing, or if the decision is appealed, until the conclusion of all the appeals. Id. If the lien is properly recorded, the Cook County assessment officer must mail a copy of the lien to the taxpayer, who then must make payment for it within 30 days after receipt. 35 ILCS 200/9-275(j).


Penalties cannot be imposed on the property that the taxpayer received by inheritance or bequest as the spouse, child, grandchild, brother, sister, niece, or nephew of the previous owner, with respect to the amount of an erroneous homestead exemption that the taxpayer received without having to apply for an exemption under Section 15-170. 35 ILCS 200/9-275(g). Until the filing of the notice of lien, the entire tax lien is not valid as to (1) a bona fide purchaser for value without notice of the erroneous homestead exemption or (2) a mortgagee, judgment creditor, or other lienholders. A title insurance policy showing that the title is free and clear operates as prima facie evidence that the subsequent property owner is without notice of the erroneous homestead exemption. 35 ILCS 200/9-275(i).


The statute establishes an amnesty period, which runs through December 31, 2013. 35 ILCS 200/9-275(l). If, within the amnesty period, the taxpayer pays the principal amount of back taxes associated with an erroneous homestead exemption taken prior to 2013, the taxpayer does not have to pay any penalty or interest for that exemption. Id. The amnesty period, however, is not available to a certain group of people, including those who are parties to criminal investigations or civil or criminal proceedings as to nonpayment, delinquency, or fraud regarding any property taxes, and those who have claimed 3 or more homestead exemptions in error. Id.

[1] Associated Press, New Law Penalizes Homeowners Claiming Extra Breaks, Southern Illinoisan, July 2013, available at

[2] Id.


Bill Number: 
SB 41
Public Act or Public Law Number: 
PA 98-93
By: ATG Underwriting Department | Posted on: Wed, 09/04/2013 - 12:09pm