February 28, 2025
Selling vacant land in Illinois comes with specific tax considerations that every seller should understand. Unlike residential or commercial properties, vacant land is taxed based on a unique assessment system that can impact overall costs. Knowing how these taxes work can help sellers plan effectively and avoid unexpected expenses.
Illinois determines property taxes using an assessment percentage applied to the land’s market value. In most counties, vacant land is assessed at one-third (33.33%) of its fair market value. However, in Cook County, vacant parcels are taxed differently—residential properties are assessed at 10%, while commercial land is taxed at 25% of its fair value.
Each county applies its tax rate based on local government budgets, school districts, and municipal expenses. These rates can fluctuate depending on economic factors and policy changes.
Illinois encourages property development through developer-friendly tax policies. If vacant land is in the process of being converted into residential, commercial, or industrial property, it may qualify for a developer’s preferential assessment.
Under this program, taxes are based on the land’s prior use value rather than its projected post-development worth. This benefit remains in place until the development reaches a specific stage, such as the completion of a habitable structure. This provision can help reduce tax liability during the early phases of construction.
When selling vacant land, the seller is responsible for property taxes up until the closing date. Because Illinois property taxes are often paid in arrears (meaning the bill covers the previous year), the seller may need to provide a prorated tax credit to the buyer.
For instance, if the sale takes place in July but taxes are paid annually, the seller might owe the buyer for the first half of the year’s taxes, ensuring the buyer is not paying for a period before they owned the land.
While Illinois offers numerous exemptions for homeowners, such as homestead exemptions, most vacant land does not qualify for these reductions. However, landowners planning development projects may be eligible for temporary tax relief programs, such as the developer’s preferential assessment mentioned earlier.
To find out whether a property qualifies for any tax benefits, sellers should consult their county assessor’s office or a real estate tax professional.
If a landowner believes their property tax assessment is too high, they have the right to challenge it. The appeals process typically involves:
Successfully appealing an assessment can lead to a lower property tax bill, making this an important step for sellers looking to manage costs.
Understanding how property taxes apply to vacant land in Illinois can help sellers make informed decisions before listing their property. By knowing how assessments work, what tax responsibilities come with a sale, and whether exemptions are available, landowners can better plan their transactions and avoid unexpected financial burdens.
Consulting a real estate attorney or tax professional can further clarify specific tax implications based on location and land use.
Our team is located in the United States – so they can connect with you anytime.
Call (754)-300-0612
You can also email us at offers@activeacres.com and we will get back to you right away.
Copyright © 2024 Active Acres Properties LLC – All rights reserved.
