Bill Text: IL HB3279 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Repeals the Real Estate Transfer Tax Law of the Property Tax Code. Moves provisions concerning the real estate transfer declarations and exemptions to the Conveyances Act. Makes conforming changes.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced) 2023-03-16 - Added Co-Sponsor Rep. Chris Miller [HB3279 Detail]

Download: Illinois-2023-HB3279-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3279 Introduced , by Rep. Blaine Wilhour SYNOPSIS AS INTRODUCED:
35 ILCS 200/15-175
35 ILCS 200/17-10
35 ILCS 200/Art. 31 rep.
765 ILCS 5/40 new
765 ILCS 5/41 new
Repeals the Real Estate Transfer Tax Law of the Property Code. Moves provisions concerning the real estate transfer declarations and exemptions to the Conveyance Act. Makes conforming changes.
LRB103 05276 SPS 50294 b
A BILL FOR
HB3279 LRB103 05276 SPS 50294 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by changing
Sections 15-175 and 17-10 as follows:
(35 ILCS 200/15-175)
Sec. 15-175. General homestead exemption.
(a) Except as provided in Sections 15-176 and 15-177,
homestead property is entitled to an annual homestead
exemption limited, except as described here with relation to
cooperatives or life care facilities, to a reduction in the
equalized assessed value of homestead property equal to the
increase in equalized assessed value for the current
assessment year above the equalized assessed value of the
property for 1977, up to the maximum reduction set forth
below. If however, the 1977 equalized assessed value upon
which taxes were paid is subsequently determined by local
assessing officials, the Property Tax Appeal Board, or a court
to have been excessive, the equalized assessed value which
should have been placed on the property for 1977 shall be used
to determine the amount of the exemption.
(b) Except as provided in Section 15-176, the maximum
reduction before taxable year 2004 shall be $4,500 in counties

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with 3,000,000 or more inhabitants and $3,500 in all other
counties. Except as provided in Sections 15-176 and 15-177,
for taxable years 2004 through 2007, the maximum reduction
shall be $5,000, for taxable year 2008, the maximum reduction
is $5,500, and, for taxable years 2009 through 2011, the
maximum reduction is $6,000 in all counties. For taxable years
2012 through 2016, the maximum reduction is $7,000 in counties
with 3,000,000 or more inhabitants and $6,000 in all other
counties. For taxable years 2017 through 2022, the maximum
reduction is $10,000 in counties with 3,000,000 or more
inhabitants and $6,000 in all other counties. For taxable
years 2023 and thereafter, the maximum reduction is $10,000 in
counties with 3,000,000 or more inhabitants, $8,000 in
counties that are contiguous to a county of 3,000,000 or more
inhabitants, and $6,000 in all other counties. If a county has
elected to subject itself to the provisions of Section 15-176
as provided in subsection (k) of that Section, then, for the
first taxable year only after the provisions of Section 15-176
no longer apply, for owners who, for the taxable year, have not
been granted a senior citizens assessment freeze homestead
exemption under Section 15-172 or a long-time occupant
homestead exemption under Section 15-177, there shall be an
additional exemption of $5,000 for owners with a household
income of $30,000 or less.
(c) In counties with fewer than 3,000,000 inhabitants, if,
based on the most recent assessment, the equalized assessed

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value of the homestead property for the current assessment
year is greater than the equalized assessed value of the
property for 1977, the owner of the property shall
automatically receive the exemption granted under this Section
in an amount equal to the increase over the 1977 assessment up
to the maximum reduction set forth in this Section.
(d) If in any assessment year beginning with the 2000
assessment year, homestead property has a pro-rata valuation
under Section 9-180 resulting in an increase in the assessed
valuation, a reduction in equalized assessed valuation equal
to the increase in equalized assessed value of the property
for the year of the pro-rata valuation above the equalized
assessed value of the property for 1977 shall be applied to the
property on a proportionate basis for the period the property
qualified as homestead property during the assessment year.
The maximum proportionate homestead exemption shall not exceed
the maximum homestead exemption allowed in the county under
this Section divided by 365 and multiplied by the number of
days the property qualified as homestead property.
(d-1) In counties with 3,000,000 or more inhabitants,
where the chief county assessment officer provides a notice of
discovery, if a property is not occupied by its owner as a
principal residence as of January 1 of the current tax year,
then the property owner shall notify the chief county
assessment officer of that fact on a form prescribed by the
chief county assessment officer. That notice must be received

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by the chief county assessment officer on or before March 1 of
the collection year. If mailed, the form shall be sent by
certified mail, return receipt requested. If the form is
provided in person, the chief county assessment officer shall
provide a date stamped copy of the notice. Failure to provide
timely notice pursuant to this subsection (d-1) shall result
in the exemption being treated as an erroneous exemption. Upon
timely receipt of the notice for the current tax year, no
exemption shall be applied to the property for the current tax
year. If the exemption is not removed upon timely receipt of
the notice by the chief assessment officer, then the error is
considered granted as a result of a clerical error or omission
on the part of the chief county assessment officer as
described in subsection (h) of Section 9-275, and the property
owner shall not be liable for the payment of interest and
penalties due to the erroneous exemption for the current tax
year for which the notice was filed after the date that notice
was timely received pursuant to this subsection. Notice
provided under this subsection shall not constitute a defense
or amnesty for prior year erroneous exemptions.
For the purposes of this subsection (d-1):
"Collection year" means the year in which the first and
second installment of the current tax year is billed.
"Current tax year" means the year prior to the collection
year.
(e) The chief county assessment officer may, when

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considering whether to grant a leasehold exemption under this
Section, require the following conditions to be met:
(1) that a notarized application for the exemption,
signed by both the owner and the lessee of the property,
must be submitted each year during the application period
in effect for the county in which the property is located;
(2) that a copy of the lease must be filed with the
chief county assessment officer by the owner of the
property at the time the notarized application is
submitted;
(3) that the lease must expressly state that the
lessee is liable for the payment of property taxes; and
(4) that the lease must include the following language
in substantially the following form:
"Lessee shall be liable for the payment of real
estate taxes with respect to the residence in
accordance with the terms and conditions of Section
15-175 of the Property Tax Code (35 ILCS 200/15-175).
The permanent real estate index number for the
premises is (insert number), and, according to the
most recent property tax bill, the current amount of
real estate taxes associated with the premises is
(insert amount) per year. The parties agree that the
monthly rent set forth above shall be increased or
decreased pro rata (effective January 1 of each
calendar year) to reflect any increase or decrease in

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real estate taxes. Lessee shall be deemed to be
satisfying Lessee's liability for the above mentioned
real estate taxes with the monthly rent payments as
set forth above (or increased or decreased as set
forth herein).".
In addition, if there is a change in lessee, or if the
lessee vacates the property, then the chief county assessment
officer may require the owner of the property to notify the
chief county assessment officer of that change.
This subsection (e) does not apply to leasehold interests
in property owned by a municipality.
(f) "Homestead property" under this Section includes
residential property that is occupied by its owner or owners
as his or their principal dwelling place, or that is a
leasehold interest on which a single family residence is
situated, which is occupied as a residence by a person who has
an ownership interest therein, legal or equitable or as a
lessee, and on which the person is liable for the payment of
property taxes. For land improved with an apartment building
owned and operated as a cooperative, the maximum reduction
from the equalized assessed value shall be limited to the
increase in the value above the equalized assessed value of
the property for 1977, up to the maximum reduction set forth
above, multiplied by the number of apartments or units
occupied by a person or persons who is liable, by contract with
the owner or owners of record, for paying property taxes on the

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property and is an owner of record of a legal or equitable
interest in the cooperative apartment building, other than a
leasehold interest. For land improved with a life care
facility, the maximum reduction from the value of the
property, as equalized by the Department, shall be multiplied
by the number of apartments or units occupied by a person or
persons, irrespective of any legal, equitable, or leasehold
interest in the facility, who are liable, under a life care
contract with the owner or owners of record of the facility,
for paying property taxes on the property. For purposes of
this Section, the term "life care facility" has the meaning
stated in Section 15-170.
"Household", as used in this Section, means the owner, the
spouse of the owner, and all persons using the residence of the
owner as their principal place of residence.
"Household income", as used in this Section, means the
combined income of the members of a household for the calendar
year preceding the taxable year.
"Income", as used in this Section, has the same meaning as
provided in Section 3.07 of the Senior Citizens and Persons
with Disabilities Property Tax Relief Act, except that
"income" does not include veteran's benefits.
(g) In a cooperative or life care facility where a
homestead exemption has been granted, the cooperative
association or the management of the cooperative or life care
facility shall credit the savings resulting from that

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exemption only to the apportioned tax liability of the owner
or resident who qualified for the exemption. Any person who
willfully refuses to so credit the savings shall be guilty of a
Class B misdemeanor.
(h) Where married persons maintain and reside in separate
residences qualifying as homestead property, each residence
shall receive 50% of the total reduction in equalized assessed
valuation provided by this Section.
(i) In all counties, the assessor or chief county
assessment officer may determine the eligibility of
residential property to receive the homestead exemption and
the amount of the exemption by application, visual inspection,
questionnaire or other reasonable methods. The determination
shall be made in accordance with guidelines established by the
Department, provided that the taxpayer applying for an
additional general exemption under this Section shall submit
to the chief county assessment officer an application with an
affidavit of the applicant's total household income, age,
marital status (and, if married, the name and address of the
applicant's spouse, if known), and principal dwelling place of
members of the household on January 1 of the taxable year. The
Department shall issue guidelines establishing a method for
verifying the accuracy of the affidavits filed by applicants
under this paragraph. The applications shall be clearly marked
as applications for the Additional General Homestead
Exemption.

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(i-5) This subsection (i-5) applies to counties with
3,000,000 or more inhabitants. In the event of a sale of
homestead property, the homestead exemption shall remain in
effect for the remainder of the assessment year of the sale.
Upon receipt of a transfer declaration transmitted by the
recorder pursuant to Section 40 of the Conveyances Act Section
31-30 of the Real Estate Transfer Tax Law for property
receiving an exemption under this Section, the assessor shall
mail a notice and forms to the new owner of the property
providing information pertaining to the rules and applicable
filing periods for applying or reapplying for homestead
exemptions under this Code for which the property may be
eligible. If the new owner fails to apply or reapply for a
homestead exemption during the applicable filing period or the
property no longer qualifies for an existing homestead
exemption, the assessor shall cancel such exemption for any
ensuing assessment year.
(j) In counties with fewer than 3,000,000 inhabitants, in
the event of a sale of homestead property the homestead
exemption shall remain in effect for the remainder of the
assessment year of the sale. The assessor or chief county
assessment officer may require the new owner of the property
to apply for the homestead exemption for the following
assessment year.
(k) Notwithstanding Sections 6 and 8 of the State Mandates
Act, no reimbursement by the State is required for the

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implementation of any mandate created by this Section.
(l) The changes made to this Section by this amendatory
Act of the 100th General Assembly are effective for the 2018
tax year and thereafter.
(Source: P.A. 102-895, eff. 5-23-22.)
(35 ILCS 200/17-10)
Sec. 17-10. Sales ratio studies. The Department shall
monitor the quality of local assessments by designing,
preparing and using ratio studies, and shall use the results
as the basis for equalization decisions. In compiling sales
ratio studies, the Department shall exclude from the reported
sales price of any property any amounts included for personal
property and, for sales occurring through December 31, 1999,
shall exclude seller paid points. The Department shall not
include in its sales ratio studies sales of property which
have been platted and for which an increase in the assessed
valuation is restricted by Section 10-30. The Department shall
not include in its sales ratio studies the initial sale of
residential property that has been converted to condominium
property. The Department shall include compulsory sales
occurring on or after January 1, 2011 in its sales ratio
studies. The Department shall also consider whether the
compulsory sale would otherwise be considered an arm's length
transaction, based on existing sales ratio study standards.
When the declaration required under Section 40 of the

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Conveyances Act the Real Estate Transfer Tax Law contains
financing information required under Section 31-25, the
Department shall adjust sales prices to exclude seller-paid
points and shall adjust sales prices to "cash value" when
seller related financing is used that is different than the
prevailing cost of cash. The prevailing cost of cash for sales
occurring on or after January 1, 1992 shall be established as
the monthly average 30-year fixed Primary Mortgage Market
Survey rate for the North Central Region as published weekly
by the Federal Home Loan Mortgage Corporation, as computed by
the Department, or such other rate as determined by the
Department. This rate shall be known as the survey rate. For
sales occurring on or after January 1, 1992, through December
31, 1999, adjustments in the prevailing cost of cash shall be
made only after the survey rate has been at or above 13% for 12
consecutive months and will continue until the survey rate has
been below 13% for 12 consecutive months. For sales occurring
on or after January 1, 2000, adjustments for seller paid
points and adjustments in the prevailing cost of cash shall be
made only after the survey rate has been at or above 13% for 12
consecutive months and will continue until the survey rate has
been below 13% for 12 consecutive months. The Department shall
make public its adjustment procedure upon request.
(Source: P.A. 96-1083, eff. 7-16-10.)
(35 ILCS 200/Art. 31 rep.)

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Section 10. The Property Tax Code is amended by repealing
Article 31.
Section 15. The Conveyances Act is amended by adding
Sections 40 and 41 as follows:
(765 ILCS 5/40 new)
Sec. 40. Transfer declaration. At the time a deed, a
document transferring a controlling interest in real property,
or trust document is presented for recordation, or within 3
business days after the transfer is effected, whichever is
earlier, there shall also be presented to the recorder or
registrar of titles a declaration, signed by at least one of
the sellers and also signed by at least one of the buyers in
the transaction or by the attorneys or agents for the sellers
or buyers. The declaration shall state information including,
but not limited to: (1) the value of the real property or
beneficial interest in real property located in Illinois so
transferred; (2) the parcel identifying number of the
property; (3) the legal description of the property; (4) the
date of the deed, the date the transfer was effected, or the
date of the trust document; (5) the type of deed, transfer, or
trust document; (6) the address of the property; (7) the type
of improvement, if any, on the property; (8) information as to
whether the transfer is between related individuals or
corporate affiliates or is a compulsory transaction; (9) the

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lot size or acreage; (10) the value of personal property sold
with the real estate; (11) the year the contract was initiated
if an installment sale; (12) any homestead exemptions, as
provided in Sections 15-170, 15-172, 15-175, and 15-176 of the
Property Tax Code as reflected on the most recent annual tax
bill; (13) the name, address, and telephone number of the
person preparing the declaration; and (14) whether the
transfer is pursuant to compulsory sale. Except as provided in
Section 41, a deed, a document transferring a controlling
interest in real property, or trust document shall not be
accepted for recordation unless it is accompanied by a
declaration containing all the information requested in the
declaration. When the declaration is signed by an attorney or
agent on behalf of sellers or buyers who have the power of
direction to deal with the title to the real estate under a
land trust agreement, the trustee being the mere repository of
record legal title with a duty of conveying the real estate
only when and if directed in writing by the beneficiary or
beneficiaries having the power of direction, the attorneys or
agents executing the declaration on behalf of the sellers or
buyers need identify only the land trust that is the
repository of record legal title and not the beneficiary or
beneficiaries having the power of direction under the land
trust agreement. The declaration form shall be prescribed by
the Department of Revenue and shall contain sales information
questions. The subject of the financing questions shall

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include any direct seller participation in the financing of
the sale or information on financing that is unconventional so
as to affect the fair cash value received by the seller.
(765 ILCS 5/41 new)
Sec. 41. Exemptions. The following deeds or trust
documents shall be exempt from the transfer declaration
described in Section 40:
(1) Deeds representing real estate transfers made
before January 1, 1968, but recorded after that date and
trust documents executed before January 1, 1986, but
recorded after that date.
(2) Deeds to or trust documents relating to (i)
property acquired by any governmental body or from any
governmental body, (ii) property or interests transferred
between governmental bodies, or (iii) property acquired by
or from any corporation, society, association, foundation
or institution organized and operated exclusively for
charitable, religious or educational purposes. However,
deeds or trust documents, other than those in which the
Administrator of Veterans Affairs of the United States is
the grantee pursuant to a foreclosure proceeding, shall
not be exempt from filing the declaration.
(3) Deeds or trust documents that secure debt or other
obligation.
(4) Deeds or trust documents that, without additional

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consideration, confirm, correct, modify, or supplement a
deed or trust document previously recorded.
(5) Deeds or trust documents where the actual
consideration is less than $100.
(6) Tax deeds.
(g) Deeds or trust documents that release property
that is security for a debt or other obligation.
(7) Deeds of partition.
(8) Deeds or trust documents made pursuant to mergers,
consolidations or transfers or sales of substantially all
of the assets of corporations under plans of
reorganization under the Federal Internal Revenue Code or
Title 11 of the Federal Bankruptcy Act.
(9) Deeds or trust documents made by a subsidiary
corporation to its parent corporation for no consideration
other than the cancellation or surrender of the
subsidiary's stock.
(10) Deeds when there is an actual exchange of real
estate and trust documents when there is an actual
exchange of beneficial interests, except that that money
difference or money's worth paid from one to the other is
not exempt from the tax. These deeds or trust documents,
however, shall not be exempt from filing the declaration.
(11) Deeds issued to a holder of a mortgage, as
defined in Section 15-103 of the Code of Civil Procedure,
pursuant to a mortgage foreclosure proceeding or pursuant

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to a transfer in lieu of foreclosure.
(12) A deed or trust document related to the purchase
of a principal residence by a participant in the program
authorized by the Home Ownership Made Easy Act, except
that those deeds and trust documents shall not be exempt
from filing the declaration.