Written by: Doug Shoemaker
If you are a Veteran and a resident of Illinois, you may benefit from the state allowing disabled veterans to have some or all of their property taxes paid. This is called a Standard Homestead Exemption for Veterans with Disabilities (SHEVD).
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
According to the form PTAX-342, you must be an Illinois resident, honorably discharged from the US Armed Services, have greater than 30% service-related disability, and be certified by the US Department of Veterans Affairs.
Can I obtain the 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 that you set up tax escrow initially and then update your loan down the road after you get your approval. 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, like Homestead Financial Mortgage, will go the extra mile and likely have you fill out form PTAX-342 prior to closing so it can be submitted concurrently with your purchase. Your local VA specialist should be happy to help you put the documents together from your closing so you can take them to the county and 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?
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