Property Tax Assessment Freeze Program

When should I apply for the Assessment Freeze? Apply as early as possible and before you begin construction so that IL SHPO can advise you as to whether the project meets the Secretary of the Interior's Standards for Rehabilitation (Standards). You are not automatically disqualified from applying if you have begun or completed construction; however, any work begun before you have an approved Part 2 is at your own risk. Work that does not meet the Standards will disqualify the entire project.

The local preservation commission approved my permit application; is that good enough? No. IL SHPO's review is independent from any local review and may vary.

Is there a cost to apply to or participate in the assessment freeze program? No. This is a free program to Illinois homeowners who rehabilitate their historic houses.

Does this program freeze my property taxes? No. It freezes your Assessed Value at the amount it was the year your rehabilitation started. You are still subject to fluctuating tax rates throughout the freeze period. This law does not prevent your Assessed Value from lowering during the freeze period.

How much do I need to spend to qualify? You must spend at least 25% of the assessor’s “Fair Cash Value” or “Fair Market Value” for your property (house + land) for the year the project began. You can find this amount on your tax bill, or by contacting your township or county assessor’s office, or by visiting their websites.

What are the Standards? The Standards for Rehabilitation guide work on historic properties while retaining their historic character. IL SHPO applies these 10 Standards, as interpreted by the National Park Service, to all assessment freeze applications.

How do the Standards apply to a typical house? The Standards demand that significant historic spaces and elements be retained, while non-significant spaces and elements may be changed. The exterior front and usually the sides and their historic windows must be retained. We encourage adding weather-stripping and storm windows. The house's main rooms (i.e., living and dining rooms, vestibule, stairs, halls) and their important elements (i.e., wood floors; mantels, tile surrounds, and hearths; built-in cabinets; doors; trim and casings; and decorative ceilings and coves) must be retained. Most kitchens, baths, attics, basements, and back bedrooms can be changed as the owner desires.

How long do I have to complete my rehab project? You have 24 months for your eligible expenses to exceed 25% of the assessor's Fair Market Value. You must submit an Application within two years of project completion. If the owner submits a written request and valid explanation why the project could not be finished within two years, the Director of IDNR might grant an extension.

What are eligible expenses? They are costs incurred by the owner while rehabbing the building. They can include new roofs, repointing, historic window repair, wood refinishing, painting, drywall, electrical and mechanical systems upgrades, work on existing additions (even if they are not historic), kitchen and bath improvements, and architectural fees. Reconstructing missing historic features (i.e., porch, cornice) can count provided that it is based upon historical or physical documentation. Work paid for by grant money and insurance pay-outs (i.e., after a disaster) can be counted.

What are ineligible expenses? They are costs incurred by construction outside the existing building, including the construction of new additions, landscaping, patios, decks, driveways, and plant material. We also review ineligible expenses to ensure the Standards have been met.

How do I document my expenses? You submit scans of receipts, notated cancelled checks, paid bills, and/or contractors’ liens. A cost summary must also be included.

Can I build an addition to my house? Yes. The design will be reviewed to determine if it meets the Standards, but its cost is an ineligible expense that cannot be counted towards meeting your minimum expenditure.

How do I determine my eligible expenses if I am rehabbing my existing house and building an addition? For the Part 3 of the application, you must provide the total spent on the existing house (which are eligible expenses) separate from the total spent on building an addition (which are ineligible expenses). One way to approach it is to ask your contractor to break out the two sets of expenses in his or her estimate before construction begins and then track it during construction. This will make figuring out the two expenses easier at the end of the project. When you build an addition and rehab parts of your existing house in one project, you cannot use the project's average per-square-foot cost to determine the cost of just the rehab.

What if I want to do additional work in the future? All work done during the 12-year freeze period must be approved by IL SHPO prior to construction to ensure that it meets the Standards. If work occurs during the freeze period that was not approved as meeting the Standards, your freeze will be cancelled for the remainder of the freeze period.

Besides reviewing additional work, are there other requirements during the freeze period? Yes. Your assessor may send you an affidavit to complete each year verifying that you still are the owner-occupant and that it is still your principal residence. If you do not return the affidavit, your assessment freeze will be cancelled for the remainder of the freeze period.

What if I no longer live there during the freeze period? If the property sells, or is rented, or is no longer your principal residence, the freeze will be cancelled for the remainder of its duration, and your assessor will revise the Assessed Value to its then-current level. Your freeze does not transfer to subsequent owner-occupants. The new owner-occupant can apply for a new freeze if s/he meets the program criteria and spends more than ¼ of the revised Fair Market Value on a new rehab project.

Can I apply for the assessment freeze more than once? Yes, but the same owner-occupant in the same residence must wait 4 years after the end of the 12-year assessment freeze period before applying again, at which point s/he must spend more than 25% of the current Fair Market Value on a new rehabilitation project.

Can I act as a developer and “flip” a house? Yes. A person or company can receive approval on Parts 1 and 2 of the Application and perform the work. When the residence is sold, if the new owner-occupant submits Part 3 with the required documentation and receives approval, then s/he receives the assessment freeze on the property.

Does my own labor count? Yes, as long as you submit a “Do-It-Yourself Labor Report” with your Part 3. The allowable rate is the Illinois' minimum wage on the day you did the work. Because Illinois' minimum wage is rising in increments from January 1, 2020 through January 1, 2025, make sure you enter the correct hourly wage on the report. Professionals can use their professional rate for work within their professions; for example: plumbers can claim their professional rate for plumbing work on their house but must use minimum wage for plastering or roofing. A letter certifying your professional rate must accompany the form.

How long does it take for IL SHPO to review my application? IL SHPO reviewers will respond to a submission within 45 days, but our reviews are often handled in a shorter period of time. Feel free to check on the status of your application by calling 217-785-1153.

Can multi-unit properties receive the assessment freeze? Yes. The work on the entire building, not just on each unit, must meet the Standards. The project’s minimum expenditure must exceed 25% of the whole building’s assessor’s Fair Market Value.

  • Cooperatives: One Certificate of Rehabilitation will be issued for the building as a whole when IL SHPO approves the Part 3.
  • Condominiums: Individual unit owners must each submit a separate Part 3 to receive an assessment freeze for his or her unit.
  • Duplexes up to 6-flats: For buildings where the building owner lives in one unit as his principal residence and rents the others, a single Certificate of Rehabilitation will be issued.

Contact the Tax Incentives Manager at IL SHPO (217-524-0276), to discuss how your multi-unit property can best apply.