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Illinois Property Tax Exemption for Disabled Veterans Living in Illinois

May 26, 2023

Disabled Veteran Tax Exemption

Written by: Doug Shoemaker

There is a disability property tax exemption in Illinois for veterans. You may be eligible to receive this property tax exemption if you are a disabled veteran and a resident of Illinois. Disabled veterans may have some or all of their property taxes covered. This is called a Standard Homestead Exemption for Veterans with Disabilities (SHEVD).

Veterans without a disability will still pay property taxes in Illinois. However, those who are disabled can qualify for an exemption by completing the applicable property tax exemption form.

How much will my property taxes be lowered?

As of today, Illinois will help pay for disabled Veterans’ property taxes on the following criteria:

Percent Disabled:                                             Amount of Property Taxes Paid by State
30%-50%                                                                                              $2,500
50%-70%                                                                                              $5,000
70%+                                                                                                    All

Who qualifies? 

In order to qualify for the Illinois veteran property tax exemption, you must meet certain criteria to be eligible for the form PTAX-342. These criteria include:

  1. Being an Illinois resident
  2. Being honorably discharged from the US Armed Services
  3. Having a service-related disability of over 30%
  4. Being certified by the US Department of Veterans Affairs.

Can I obtain the Illinois property tax exemption at the time of my home purchase?

Yes, you can, but when choosing your lender, do not assume this will automatically be done. Most lenders require you to set up tax escrow when you apply for a loan. Later, when you get your approval, you must update your loan. This can needlessly cost you thousands of dollars.

You will want to work with a lender that will approve and close your loan prior to the county’s approval.

When you apply for the exemption and are approved, you will send the approval to the servicer. Once they re-analyze your escrow account, they will adjust to remove tax escrow. This can sometimes take a few months to a year or more, depending on your lender’s guidelines.

If you are not offered the option of closing without tax escrow, seeking a second opinion may be a good idea. Some lenders, such as Homestead Financial Mortgage, may require you to fill out form PTAX-342 before closing. This can be submitted at the same time as your purchase. They are willing to go the extra mile for you.

Your local VA specialist is available to help you. They can help you put together the documents from your closing. Take these documents to the county to apply for the exemption.

Keep in mind that certain counties may require you to re-apply each year to keep the exemption. This is because it is only available for Veterans living in their primary residence.

Can I obtain the tax exemption after I’ve purchased a home?

Yes, you can. However, the year the SHEVD is granted is called the assessment year. The taxes on your property will not begin to be credited until the following year. To limit delays, you are much better off setting it up during your initial loan process.

How do I get started? 

The Illinois Veterans property tax exemption form is different based on county. Or, if you would prefer, talk to your local VA specialist, or give us a call. We are always glad to help our Veteran community. You can also research by visiting Property Tax Exemptions (illinois.gov). The form is available on the applicable Illinois county assessor website. For example, St. Clair County, IL, is here: PTAX-342, Application for Standard Homestead Exemption for Veterans with Disabilities (SHEVD) (st-clair.il.us)

Learn More about Getting a VA Loan with Homestead Financial Mortgage
Using a VA Loan to Buy a Home
Pre-Approval Requirements Unique to VA Home Loans

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