Property Tax Loop Hole

In the state of Illinois: landlords of single family homes, and landlords of a  duplex are allowed the homeowners exemption on their property tax bill.  Sorry guys, Cook County has their own rule- you will have to check that out yourself. 

The law has 2 qualifications that muct be met to qualify for the deduction.  The first is that said tenant must have occupied said property for one year.  The second is a clause or signed addendum in the lease agreement  that reads something like this;  the tenant realizes that a portion of their rent will be used to pay the property taxes on said property.

I check my taxes every year  to see that I have the homeowners exemption included on the bill.  If I don't have a number in the owner occupied box I prepare the paperwork to take to the tax assessors office.  Sometime between receiving the bill and before the first installment is due I  go in.  The necessary paperwork includes:  the original tax bill and a copy of the lease agreement with the approiate clause in the lease.  If the clause is not currently in your lease you must prepare an addendum for the tenant to sign and attach this to the lease agreement..  Make sure that you keep copies of everything and that all paperwork is signed.

My county will send me out a new tax bill and does not charge late fees while a change is being made.  Note also that counties do not make the deduction retroactive just because you did not have your paperwork in order for  the  years past.  Do not assume that once you get the homeowners exemption on your tax bill that you will automatically get the credit the following year. You must check it every year.  And the best way to make sure your paperwork is always in line is to put the clause in your lease agreement.  This avoids the hassle of tracking down a tenant for a signature.

The propery tax loop hole, I call it that because theTax Assessors Office does not advertise how you might save money on Property taxes.  There job is to make as much money as they can.  You must know your rights.  I learned this at a Illinois Real Estate Owners  (IREO)seminat that I attended a number of years ago.  I think that it pays to belong to organizations in your area.  And if you have time get involved.   There are numerous landlords associations throughout your state.  There should be one fairly close to you just google it to find out.