Bill
HB 2809
Illinois ties veteran disability exemptions to disability percentage starting 2026, culminating in full 100% exemption for 70%+ with eligibility by VA certification.
Status and timeline
- Jurisdiction: Illinois (amendment to the Property Tax Code, 35 ILCS 200/15‑169)
- Passed both chambers, signed by the Governor: 2025-05-28
- Effective date (per legislative actions): September 1, 2025
- Companion bill: SB 640
Purpose
- To revise the homestead property tax exemption for veterans with service‑connected disabilities by tying exemption amounts to the veteran’s disability percentage and phasing in a new percentage‑based approach beginning in 2026.
Key provisions and changes
- Amends Section 15‑169 of the Illinois Property Tax Code (homestead exemption for veterans with disabilities and WWII veterans).
- Disability‑based exemption schedule (major changes effective taxable year 2026 and thereafter):
- 30% — If veteran has a service‑connected disability of 30% to less than 50%: exemption equals 30% of the assessed value of the property.
- 50% — If veteran has a service‑connected disability of 50% to less than 70%: exemption equals 50% of the assessed value.
- 100% (full exemption) — If veteran has a service‑connected disability of 70% or more: property is exempt from taxation.
- Transitional provisions for earlier years:
- Taxable years 2015–2022: fixed dollar exemptions ($2,500 for 30–49%; $5,000 for 50–69%; full exemption for 70%+).
- Taxable years 2023–2025: for 70%+ disability (and certain surviving spouses), the first $250,000 in equalized assessed value (EAV) is exempt; lower tiers retained fixed dollar exemptions ($2,500; $5,000).
- Certification requirement: exemptions require certification of service‑connected disability percentage by the U.S. Department of Veterans Affairs as of the date the application is submitted for the taxable year.
- WWII veterans: for taxable years on or after 2024, homesteads of veterans who served in WWII are exempt regardless of disability level.
- Surviving spouse: exemption can carry over to a surviving spouse who holds title, permanently resides in the homestead, and does not remarry (varies by taxable year under transitional rules).
- Other technical and procedural adjustments to eligibility/application timing are included in the amended statutory language.
Who is affected
- Primary beneficiaries: Illinois homeowners who are veterans with service‑connected disabilities (and qualifying surviving spouses).
- Secondary impacts: local taxing districts and taxing bodies (potentially reduced property tax collections where properties become partially or fully exempt); county assessors and clerks handling applications and verification.
Practical considerations
- Veterans must apply and provide VA certification of disability percentage for the applicable taxable year.
- The phased schedule changes dollar‑based exemptions to percentage‑based exemptions starting in 2026, which for many veterans will change the amount of property tax relief they receive (either up or down depending on property assessed value and prior dollar exemptions).
- Implementation will require local assessment offices to adjust exemption calculations beginning with the 2026 tax year (effective date Sept. 1, 2025).
Compiled from official sources — confirm details with the bill’s official record.
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