Illinois Expands Senior Property Tax Relief – New Limits and Eligibility

Good news for senior homeowners in Illinois: a new law is making it easier to get property tax relief. Starting in the 2025 tax year, more seniors will qualify for a program that allows them to delay paying their property taxes. This change is designed to help older adults stay in their homes while managing rising living costs.

Let’s break down what’s changing, who qualifies, and how much seniors can save under the updated rules.

Overview

Illinois already has a property tax deferral program for seniors, but income limits made it hard for some retirees to qualify. The new law changes that by raising income eligibility levels over the next few years. It also gives seniors a longer time to plan and apply.

This isn’t free money—it’s a deferral. That means the taxes will still be paid eventually, usually when the home is sold. But for many seniors, this delay provides critical breathing room.

Increases

The most important change is the increase in the income limit for eligibility. Starting in 2025, the state will gradually raise the maximum allowed household income to account for inflation and rising living expenses.

Here’s how the new income thresholds will roll out:

Tax Year	Income Limit
2025	$75,000
2026	$77,000
2027+	$79,000

Previously, the income limit was just $65,000, which excluded many fixed-income retirees who owned their homes but had modest pensions or retirement savings. With this new increase, thousands more seniors will be able to apply.

Requirements

To qualify for the Senior Citizens Real Estate Tax Deferral Program, homeowners must meet a few important conditions. The rules haven’t changed much, but they’re worth reviewing:

• You must be 65 or older by June 1 of the year you apply
• The home must be your primary residence for at least three years
• Your property taxes and special assessments must be paid in full
• You need to have adequate insurance on the home

So if you’re still paying off last year’s tax bill or don’t have homeowners insurance, you’ll need to take care of that before applying.

Deferral

So how much can you defer under this program? Qualified seniors can postpone up to $7,500 per year, including any interest or administrative costs. However, this total can’t exceed 80 percent of the equity in your home.

Here’s an example: if your home is worth $200,000 and you owe $50,000 on your mortgage, your equity is $150,000. Eighty percent of that is $120,000. So you could defer up to $7,500 per year until your deferred balance reaches $120,000.

It’s important to note that this is a loan, not a grant. Interest does apply, and it must eventually be paid back, usually when the home is sold or refinanced.

Deadline

The deadline to apply for the 2025 tax year is March 1, 2026. While that sounds far away, it’s better not to wait. Gathering documentation, checking insurance coverage, and confirming your tax status can take time.

Most counties in Illinois require you to apply through your local treasurer’s or assessor’s office, so check with them for the correct forms and procedures.

Key Points for Seniors

Category	Details
Age Requirement	65 years old by June 1 of filing year
Residency	Primary home for at least 3 years
Max Income	$75,000 (2025), rising to $79,000 (2028)
Max Deferral	$7,500/year or 80% of home equity
Insurance	Must maintain fire or casualty coverage
Deadline	March 1, 2026 (for 2025 taxes)

Benefits

This program is especially helpful for retirees on fixed incomes. With property taxes in Illinois among the highest in the nation, this relief can prevent foreclosures or forced downsizing. It also gives homeowners the option to age in place without sacrificing financial stability.

If you or someone you know is 65 or older and owns a home in Illinois, now is the time to learn about this program. With the income limits rising, more seniors than ever may now be eligible.

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