In the 2021 tax year, homeowners in Cook County saved $16.7 billion in exemptions, according to research from the Chicago Metropolitan Agency for Planning and the University of Illinois Chicago Government Finance Research Center. Property taxes are a major expense for homeowners, and exemptions are one way to ease that burden.
In the same year, total homestead exemptions equaled $16.7 billion. But, property taxes fund infrastructure and other needed services, so local governments try to make up the difference by raising tax rates for everyone.
The result is an asymmetrical tax burden distribution. Some residents — particularly in suburbs south of Chicago — have seen greater increases in their tax rate as a result of homestead exemptions than others, research from CMAP and UIC shows. Take Park Forest, a south suburb that’s over two-thirds Black: The tax rate increase due to exemptions in 2021 was ten times higher than the county average.
Austen Edwards, a senior policy analyst with CMAP, says the practice of raising overall rates can erode the apparent savings homeowners get when claiming exemptions and raise costs for businesses.
“What we found was that there’s sort of a mixed picture when it comes to exemptions, that we are providing tax relief to each homeowner who claims the exemptions, but they’re paying a higher rate on the lower taxable value. And how that math works out for each homeowner depends on where they live in Cook County,” he said.
Edwards said tax policies try to be as neutral as possible. That is, they are supposed to treat similar taxpayers in the same way. But policies play out in different ways in different locations, based on the size, characteristics, property values, land use mix and share of homeowners who claim exemptions in each municipality.
“So the actual effects of an apparent uniform, neutral tax policy like homestead exemptions can vary widely across all towns and villages,” he said.
To address these disparities, the county established last year the Property Tax Reform Group, a working group researching solutions to these inequities.
How can you get a property tax exemption?
Cook County offers eight exemptions for homeowners to reduce their property tax bill. The most common is the homeowner exemption, which saves homeowners an average of $950 annually.
You can apply for an exemption through the Cook County Assessor’s Office, which will review your application. If you think you missed out on an exemption in a previous tax year, you can file a certificate of error with the Assessor’s Office.
Aside from the homeowner exemption, many Cook County residents may be eligible for other property tax breaks. Exemptions are available for seniors, low-income seniors, people with disabilities and veterans. Home renovations that improve the home’s property value are also eligible for a tax break.
