Senior tax 'freeze' prevents big increases in property taxes

 
 
Posted6/10/2022 6:00 AM

Q: My wife and I applied for and received the senior tax exemption for our home. Recently a friend told me he also had a senior freeze. He attempted to explain it to me but did not do a very good job. What is a senior freeze and do my wife and I qualify for this?

A: Quick review. If at least one owner of a property is 65 years of age or older and uses the property as their principal residence, the property qualifies for the senior exemption. The exemption is calculated by multiplying the exemption amount ($8,000) times the local tax rate. You can find your local tax rate on your property tax bill. So, if your tax rate is 10%, multiply $8,000 x 10% and your senior exemption reduces your tax bill by $800.

 

The senior freeze has the same qualifications as the senior exemption with one additional qualifier. The household income must be under $65,000 per year.

The impact on the homeowners tax bill is also different. Whereas the senior exemption takes a fixed amount ($8,000) and multiplies that amount by your local tax rate to determine your tax reduction, the senior freeze "freezes" your assessed valuation. Of course, the logical follow up question is "How does this help me?"

Well, this is how. Your tax bill has three components, the assessed valuation, state multiplier and tax rate. Multipliers and tax rates generally don't move much from year to year. When you experience large increases in your tax bill, it's almost always the result of a significant increase in your home's assessed valuation.

Assessed valuation increases occur sometimes from the sale of a property and sometimes from regularly scheduled reassessments. Either way, reassessments generally result in an increased tax bill.

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Now, once you qualify for the freeze (and remain qualified), your fear of increasing reassessments is over. Your assessed valuation remains locked at the value of your assessment when you qualified for the freeze. This almost always prevents the large tax increases many homeowners have experienced through the years. And the longer you remain in the property and qualify for the freeze, the more of a value this becomes.

Contact your county assessors office for further information.

Q: I have a tenant whose written lease is up at the end of June. He has been difficult to deal with and I want him out when the lease ends. Unfortunately, he tells me he wants to stay and he has been bugging me for a new lease. I told him I wasn't sure about his renewing the lease and he says because I didn't give him 60 days notice that I intend to terminate the lease, he can stay another year. Is this true?

A: No. So long as you have a written lease containing a firm end date, generally no notice is required to be given to a tenant who you do not intend to renew their lease.

The only exceptions are if the terms of the lease contain a notice provision or a local ordinance requires notice that you do not intend to renew the lease. In Chicago, for instance, landlords must give tenants 30 days written notice if the lease will not be renewed. If the landlord fails to do this, the tenant can stay in the property for 60 days after the lease ends under the same terms and conditions of the previous lease.

                                                                                                                                                                                                                       
 

Regardless of whether or not you failed to give a required notice, the tenant would not obtain the right to remain another year.

Q: The property my family has rented for the past four years is being sold. Our landlord is telling us we must move out by July 31. We have a written lease through Oct. 31. Does the new owner have to honor the terms of our lease?

A: Yes. So long as you comply with the terms of your lease, the owner, whoever it may be, must also honor the lease terms, including your ability to maintain possession of the property through Oct. 31.

Sometimes in these situations, owners will offer enticements to tenants to move out early. If your current landlord has promised possession of the property to his or her buyer at closing, you are in a strong position to negotiate a buyout of your lease. Otherwise, stay until Oct. 31 if you wish.

• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.

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