A new property tax incentive passed the Illinois General Assembly in the landmark affordable housing omnibus and is now on to Governor JB Pritzker (D) for signature. The incentive establishes tiers of affordability and property tax relief:
- Tier 1: If rental buildings of seven+ units hold between 15 percent and 35 percent of their units at affordable levels, they can receive a 25 percent reduction in their assessed value.
- Tier 2: If rental buildings of seven+ units hold at least 35 percent or more of their units at affordable levels (at or below 60 percent of AMI), they are eligible to receive a 35 percent decrease in assessed value; and
- Tier 3: Rental buildings in downtown Chicago and certain suburbs may qualify for the incentive if they hold at least 20 percent of their units at affordable levels. The incentive is based on the difference between the value of the property one year before the affordable units are occupied and post-construction assessed value and declines over time. See summary for more details.
Property owners who comply with the terms of the program can receive the reduction for ten years, and they can renew for two additional ten-year terms (30 years total) if the Department of Buildings certifies they are in good condition.