The practice of allowing individuals to homestead a property provides protection against the loss of equity inproperty if the owner has to sell the home due to debts or bankruptcy. Homestead exemptions also lower property taxes. If a person waives their homestead exemption, their property may be awarded to collectors to repay debts without them getting any money from the sale. In Illinois, all counties except Cook County allow individuals to exercise their homestead rights on their properties.
Illinois Homestead Law Basics
Illinois homestead law serves provides homeowners with a way to protect some of their home equity if the home has to be sold due to debts. It also provides a discount on property taxes for homeowners. In Illinois, individuals leasing a property who are responsible for paying the taxes on that property and have a vested interest in it may also be eligible for the homestead exemption.
Waiving a Homestead Exemption
If a homeowner waives their homestead exemption, they get none of the benefits the exemption provides. Their equity in the home will not be protected in the event of a forced sale and they will have to pay higher taxes than other homeowners with similar home values who are using the exemption.
Homestead Exemption Amounts
If an individual decides to waive their homestead exemption, they are not eligible for any monetary benefit that would be provided by the exemption. The homestead exemption allows up to a $7,500 tax credit on property taxes for a single owner or $15,000 for a married couple with equal interest in the residence. In the event the home must be sold to repay debts, a single homeowner can receive $15,000 in protected equity and $30,000 for a married couple.
Waiving the Homestead Exemption
Illinois homeowners can waive their homestead exemptions by signing a waiver or other document that basically states that they knowingly and willingly waive their homestead exemption rights. Some mortgages have clauses written directly into the contract the homeowner signed to get the loan for the home that waive a homeowners homestead rights in the event of a foreclosure.