A major new law in Illinois has broadened the property tax relief available to older homeowners, helping more seniors manage the financial burden of rising property costs. The changes update important eligibility limits and expand access to the Senior Citizens Real Estate Tax Deferral Program, a state initiative designed to support seniors who want to remain in their own homes.
These adjustments aim to protect individuals on fixed incomes from being forced out of their communities due to increasing taxes on residential property. Lawmakers and state leaders emphasize that older residents have contributed to their neighborhoods for decades and deserve stability as living expenses rise.
The expanded relief takes effect beginning with the 2025 tax year, giving eligible homeowners new opportunities to defer tax payments and preserve financial security. Qualified seniors now have clear pathways to receive this support, provided they meet specific age, income, and residency requirements.
Table of Contents
What the New Law Changes
The new legislation updates income eligibility levels for the Senior Citizens Real Estate Tax Deferral Program. These increases are scheduled to occur gradually over several years to allow broader participation.
Previously, seniors with moderate retirement income were often excluded from the program. The updated thresholds are designed to reflect current economic conditions and ensure the program remains accessible to eligible homeowners.
Under the law, income limits will increase in stages beginning in 2025. Each increase allows additional seniors to qualify without altering other core program requirements.
The changes apply statewide and are administered through county-level offices under guidance from the Illinois Department of Revenue.
🏡 Seniors in IL: Expanded tax relief is coming!
New state law raises income limits for the Senior Citizens Real Estate Tax Deferral Program:
💵 Tax Yr 2025: $75K
💵 Tax Yr 2026: $77K
💵 Tax Yr 2027+: $79K
📅 Apply by 3/1/25 (for TY’25)
📞 Contact your county collector pic.twitter.com/gfcuaj206a— ILDeptOfRevenue (@ILDeptofRevenue) December 21, 2025
Updated Income Limits for Eligibility
Before the change, homeowners could qualify for the state’s Senior Tax Deferral Program only if their household income was below a certain level. Now, the law raises this income threshold in steps over the next few years:
- For tax year 2025 and beyond, eligibility increases begin.
- In 2026, the maximum household income limit will rise to $75,000.
- By 2027, it increases to $77,000.
- Starting in 2028 and after, the limit becomes $79,000.
This phased increase means more seniors whose yearly income would previously have disqualified them can now participate. The higher limits aim to reflect changes in cost of living and ensure more older homeowners are included in the relief program.
Who Can Qualify Under the Expanded Rules
The law does not change the core eligibility standards related to age or home ownership. Seniors must still meet established residency and ownership conditions.
Applicants must be at least 65 years old and must occupy the property as their primary residence. The home must have been owned and lived in by the applicant for a minimum period before applying.
The property must also be free from unpaid property taxes or special assessments at the time of application. This ensures the deferral applies only to future tax obligations.
Basic Eligibility Requirements
To qualify for the Senior Property Tax Deferral Program, applicants must:
- Be 65 years or older
- Own and live in the home as a primary residence
- Have lived in and owned the property for at least three years
- Have no delinquent property taxes or special assessments
- Maintain required home insurance coverage
Meeting all criteria is necessary for approval.
How the Property Tax Deferral Program Works
The program allows eligible seniors to postpone paying a portion of their annual property tax bill. Deferred taxes become a lien against the property rather than an immediate payment obligation.
Eligible homeowners may defer up to $7,500 per year, which can include property taxes, interest, and applicable fees. The total deferred amount is also limited to 80 percent of the home’s equity, whichever amount is lower.
Deferred taxes do not need to be repaid while the homeowner continues living in the residence under program rules. Repayment typically occurs when the home is sold, transferred, or no longer serves as the applicant’s primary residence.
When Deferred Taxes Must Be Repaid
Deferred property taxes are not forgiven. Instead, repayment is triggered by specific events outlined in state rules.
Repayment generally occurs when the property is sold, ownership changes, or the homeowner permanently moves out. In some cases, repayment may also occur after the death of the homeowner, depending on estate arrangements.
Interest accrues on deferred amounts at a rate set by state law. The terms are disclosed at the time of application.
Application Process and Deadline
Applications for the Senior Tax Deferral Program are handled by local county collectors. Seniors must apply each year they wish to defer taxes.
For the 2025 tax year, applications must be submitted by March 1, 2026. Required documents typically include proof of age, income, property ownership, and insurance coverage.
County offices provide application forms and guidance. Approval is not automatic and depends on meeting all eligibility requirements.
How This Law Supports Housing Stability
The expanded income limits allow more seniors to remain eligible without reducing benefits for existing participants. The program continues to function as a deferral rather than a tax reduction.
By delaying payments instead of eliminating them, the law maintains local tax revenue structures while providing temporary financial relief to qualifying homeowners.
State officials have confirmed that the program expansion does not impact school funding formulas or municipal tax rates.