Here are the unhappy totals for real estate sales for Cook County single-family homes for May 2007 compared to last year:
May 2007 2786 houses sold
May 2006 4690 houses sold
This is a steep drop of almost 50%. The strange thing is that it was already slowing down in May 2006. We don’t see anyone talking about "flipping" houses anymore (or even buying and rehabbing them). The only ones really busy are the foreclosure attorneys.
When a client sets up a living trust, we often record a new deed to their home transferring it to their living trust. In the past this caused no problem with the homeowner’s exemption on the real estate tax bill. Now it does cause a problem.
Background: The homeowner’s exemption is available only on your primary residence and reduces the tax bill by about $400.00. Many will remember, years ago, the infamous "postcard" that had to be completed each year and mailed back to the assessor in order to keep the exemption. A few years ago, the assessor wisely ditched the postcard. So once you had your homeowner’s exemption you were all set and didn’t have to do anything annually or otherwise to maintain the exemption. (FYI- No other county requires any actions to maintain a homeowner’s exemption–you just get it.)
Recently, the Cook Co. Assessor’s office, in an apparent sleazy, revenue grab decided to require that homeowner’s who deeded their properties to living trusts (really it applies to any title transfer, not just deeds to living trusts, including a quitclaim deed in a divorce, a deed to a land trust or just changing titleholders) need to reapply for the homeowner’s exemption, or they will lose the exemption.
This is a very strange move. They do mail a notice to the homeowner (who transferred title to the trust) to reapply. Realistically, how many will read this? I think they know that many will ignore the notice.
This is a joke and the assessor’s policy needs to be changed immediately. I have heard that some attorneys have filed suit to reverse this unwise policy.
This seems to apply to transfers made during 2006 only. If you put your house in a living trust before 2006, you have nothing to worry about. If you transferred your house to a trust in 2006 or 2007 watch for the notice from the assessor’s office. You can reapply for the exemption online. Here is the site to reapply for the homeowner’s exemption.