If you’re a veteran living in Illinois with a service-connected disability, you may qualify for one of the most valuable — and often overlooked — property tax benefits in the state.

The Standard Homestead Exemption for Veterans with Disabilities reduces the taxable value of your primary residence every year. For veterans rated 70% or higher, this exemption can eliminate property taxes on most homes altogether.

How the exemption works

Illinois calculates property taxes based on a home’s Equalized Assessed Value (EAV). This exemption lowers that value before taxes are calculated, directly reducing your tax bill.

The amount of relief depends on your VA disability rating:

Veterans rated 30% to 49% receive a $2,500 reduction in EAV

Veterans rated 50% to 69% receive a $5,000 reduction in EAV

Veterans rated 70% or higher receive an exemption on the first $250,000 of EAV

For many homeowners, especially outside major metro areas, a 70% rating can result in little to no property taxes owed.

SURVIVING SPOUSE BENEFITS

Illinois also extends strong protections to surviving spouses:

• An un-remarried surviving spouse may continue receiving the exemption

• The exemption can be transferred to a new primary residence

• If the veteran was killed in the line of duty, the surviving spouse may qualify for a 100% EAV exemption

• As of tax year 2023, surviving spouses receiving Dependency & Indemnity Compensation (DIC) due to a service-connected death may also qualify — even if the veteran never previously used the exemption

Special World War II provision

For tax years 2024 and after, if the veteran served during World War II, the property is fully exempt from taxation, regardless of disability level.

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How to apply?

This exemption is handled at the county level, not through your lender or the VA.

You’ll typically need:

• VA award letter showing disability percentage

• Proof of ownership or legal interest

• Form PTAX-342, filed with your Chief County Assessment Office

Important limitations

For a single tax year, this exemption cannot be combined with:

• Veterans with Disabilities Exemption for Specially Adapted Housing, or

• Homestead Exemption for Persons with Disabilities

Property tax relief can dramatically change what “affordable homeownership” looks like for veterans in Illinois. If you’re buying, selling, or planning ahead, understanding how and when to file this exemption matters just as much as the loan itself.

If you want help planning around these benefits or making sure nothing gets missed during a purchase, visit RedpointRE.com/veteran or reach out directly.