What property tax exemption do disabled veterans get in Illinois?
By Kyle Melvin · NMLS #1486450 · REV Mortgage · Licensed in Illinois ·
Short answer
Illinois exempts part or all of a disabled veteran's home from property tax under 35 ILCS 200/15-169, in tiers by rating: a partial exemption of equalized assessed value at 30–49%, a larger one at 50–69%, and a full exemption at 70% and above, subject to a cap on the home's value. A separate exemption under § 15-165 covers veterans in specially adapted housing. In a state where the property tax bill is often the largest line in a mortgage payment after principal and interest, the 70%-and-above tier can remove it entirely, and it stacks on an ordinary VA loan.
- State
- Illinois
- State loan program
- None — federal VA loan only
- Installations covered
- Naval Station Great Lakes
- Licensing
- Kyle Melvin is licensed in Illinois
Illinois has some of the highest effective property tax rates in the country, and around Naval Station Great Lakes — Lake County — they are among the highest in the state. That makes the state's disabled veteran exemption worth more here than an equivalent benefit almost anywhere else. It is tiered by rating, it is capped by home value, and at 70% and above it eliminates the bill on the homestead.
The Disabled Veterans' Standard Homestead Exemption
35 ILCS 200/15-169 exempts a portion of the equalized assessed value (EAV) of a homestead owned and occupied by a veteran with a service-connected disability, in three tiers:
| VA rating | Exemption |
|---|---|
| 30% to 49% | A fixed reduction in EAV |
| 50% to 69% | A larger fixed reduction in EAV |
| 70% and above | Full exemption, up to the statutory EAV cap |
The exemption applies only if the homestead's EAV is below a statutory cap. Because EAV is a fraction of market value (one-third in most of Illinois, with a different classification system in Cook County), the cap corresponds to a market value substantially higher than the EAV figure itself. Homes above the cap receive no exemption under this section.
Other features:
- Ownership and occupancy. The veteran must own and occupy the home as the principal residence on January 1 of the tax year, or, for a newly purchased home, meet the occupancy requirement as the county applies it.
- Discharge. Honorable discharge is required.
- Surviving spouse. The un-remarried surviving spouse of a qualifying veteran continues to receive the exemption, and can transfer it to a new homestead.
- Annual claim. Most counties require an annual application with the chief county assessment officer; some allow renewal by affidavit for permanent ratings.
Related exemptions
- Specially adapted housing — § 15-165. A veteran with a service-connected disability who received federal funds for specially adapted housing receives a separate exemption on that home.
- Returning veterans — § 15-167. A one-time exemption for the tax year a veteran returns from active duty in an armed conflict.
- General homestead and senior exemptions apply to everyone and stack with the veteran exemption, subject to their own rules.
Illinois veteran benefits at a glance
| Benefit | Authority | Who qualifies | Effect |
|---|---|---|---|
| Disabled veterans' standard homestead exemption | 35 ILCS 200/15-169 | 30%+ service-connected; homestead under the EAV cap | Tiered reduction; full exemption at 70%+ |
| Surviving spouse continuation | § 15-169 | Un-remarried surviving spouse | Exemption continues and transfers |
| Specially adapted housing exemption | 35 ILCS 200/15-165 | Veterans with federally funded adapted housing | Separate exemption on that home |
| Returning veterans' exemption | 35 ILCS 200/15-167 | Veterans returning from armed conflict | One-time reduction |
| VA loan | Federal | Any eligible veteran or service member | No down payment, no mortgage insurance; funding fee waived with a compensable rating |
What it does to a payment
In Lake County, the property tax escrow can rival the principal-and-interest payment on a modest home. A 70%-and-above veteran whose home is under the EAV cap removes that line entirely once the exemption is processed — but the lender escrows on the current bill until then, and the annual-claim structure means a lapse in filing puts the tax back on the bill. Set a reminder. Illinois also exempts military retirement pay from state income tax.
Stacking with the VA loan
Illinois has no state-run veteran mortgage program. The VA loan guidelines apply, the funding fee is waived at any compensable rating, and full entitlement means no VA loan limit. If you are arriving at Great Lakes on orders, the PCS Home Buying Guide has the timeline, and the Great Lakes guide covers the Lake County market and its taxes.
Illinois base guides
Questions people also ask
- Do disabled veterans pay property tax in Illinois?
- It depends on the rating. At 70% or above the homestead is fully exempt, subject to a cap on equalized assessed value. At 50–69% and 30–49% a fixed portion of equalized assessed value is exempt. Below 30% there is no exemption under this section.
- What is the property value cap?
- The exemption does not apply to a homestead whose equalized assessed value exceeds a statutory threshold. Equalized assessed value is a fraction of market value, so the cap corresponds to a market value well above the threshold figure. Verify the current cap with the county assessor.
- Do I have to reapply every year?
- Yes, in most counties. The exemption is claimed annually with the chief county assessment officer, with the VA letter documenting the rating. Some counties allow a veteran with a permanent rating to renew by affidavit. Check with your county.
Apply with Kyle
Buying in Illinois?
Kyle is licensed here and stacks the state benefits on the VA loan as part of the file, not as an afterthought. Start with your COE and the state you are moving to.