Property owners who rehab a historic home might run into issues in the rehab process—electrical rewiring or having to deal with foundation and structural repairs—but they could be saving money on their property taxes through the Property Tax Assessment Freeze Program.
What Is the Property Tax Assessment Freeze Program?
The Property Tax Assessment Freeze Program freezes the assessed value of a historic, owner-occupied principal residence for eight years while the property owner undertakes a substantial and approved rehab project. After that time, the assessed value is brought back to market level over a four-year time period.
The program is administered by the Illinois State Historic Preservation Office, which has set four qualification provisions.
- It must be a certified historic structure, either by being listed on the National Register of Historical Places individually or through being in a district or have a local landmark designation in a community with an approved historic preservation ordinance.
- It must be a single-family, owner-occupied principal residence. This could include a single-family home, a condominium building, a co-op building, or a residential building with up to six units as long as the building owner resides in a unit.
- It must undergo a rehabilitation whose budget exceeds 25% of the property’s assessor’s fair market value within a 24-month period.
- It must undergo a rehab project that meets the Secretary of the Interior’s “Standards for Rehabilitation.”
To determine if a rehab is eligible, property owners can find out if the property qualifies as historic by contacting the local landmark commission or consulting Chicago’s Zoning and Land Use Map if the property is in the City of Chicago.
They can find out the assessed value and market value of the property by contacting an assessor or looking at the current property tax bill. The Secretary of the Interior’s “Standards for Rehabilitation” are available online, but property owners can also contact the Illinois State Historic Preservation Offices to ask questions. The multi-page application is available online, and it’s recommended to download and submit part 2, which is the part related to Standards for Rehabilitation, of the three-part application before beginning work and early in the design process to see if it qualifies.
If the property is vacant for any time during the rehab, a property owner also might be eligible for other types of property tax relief.