If you’re a homeowner in Chicago, then you recently received some potentially unwanted mail: your real estate tax bill. No matter how prepared you are for a potential increase, many of the clients I spoke to were still surprised by what they owe. As an action oriented problem solver, I recently sat down and came up with three ways to potentially offset your new tax bill. Definitely talk to a professional in each respective category before making any decisions because these are not one-size-fits-all answers. With that said, hopefully you find something helpful that sparks an idea for you!
Refinance: As of the date of writing this article, mortgage rates are holding at about 4% and expected to hover around this number through the end of the year. If your current rate is considerably higher than 4%, it may be worth it to refinance. Here is a helpful article from the Chicago Tribune that explains scenarios where it makes sense to refinance. Closings costs and fees should be one of your first questions to a lender.
Exemptions: Applied for annually, there are four different tax exemption statuses that Chicagoans may be eligible for: Homeowner, Senior Citizen Homestead, Senior Citizen Assessment Freeze, and Home Improvement. Exemptions are a relatively easy way for Chicagoans to save on their property taxes, so I urge you to look into what may work for you. Potential savings and eligibility includes:
Homeowner: According to the County Treasurer’s website: “Taxpayers whose single-family home, townhouse, condominium, co-op or apartment building (up to six units) is their primary residence can save $250 to $2,000 per year, depending on local tax rates and assessment increases. First-time applicants must have been the occupants of the property as of January 1 of the tax year in question.”
Senior Citizen Homestead: According to the County Treasurer’s website: “Seniors can save, on average, up to $300 a year in property taxes, and up to $750 when combined with the Homeowner Exemption. The applicant must have owned and occupied the property as of January 1 and must have been 65 years of age or older during the tax year in question.”
Senior Citizen Assessment Freeze: According to the County Treasurer’s website this is the most valuable exemption, and is available to qualifying senior citizens (must have an annual household income of $65K or less) to freeze the assessed value of their property.
Home Improvement: According to the County Treasurer’s website: “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.”
3) Homeowners Insurance: one of the sometimes forgotten pieces of your monthly payment is your homeowner’s insurance. I have learned over the years that rates can vary greatly from one provider to the next, so it may be worth a few hours of poking around to see if you can find a lower rate.
With each of these three options, I know great professionals that have helped many of my clients. If you are ever looking for a referral, do not hesitate to ask!