Frequently Asked Questions
Here’s a list of the questions we get most in regard to the Homebuyer Property Tax Refund Program. If you don’t see an answer to your question here, by all means get in touch by contacting the City of Rockford Finance Department at (779) 348‐7470 or (779) 348‐7467, or by sending your question via the form available at the bottom of this website.
What types of properties qualify?
For Existing Properties: Foreclosed or Short Sale single family residential, townhouse or condo located within the corporate limits of the city of Rockford AND the Rockford School District 205.
The property must be titled by the mortgagee within 60 days of the sheriff’s sale or execution of the Deed in Lieu of Foreclosure, or within 60 days of the adoption of the Program. Before closing on a foreclosure property, homebuyers should verify with your Realtor that the property is in compliance with this requirement.
A “Short Sale” is defined as an arms-length sale that includes a mortgage lender forgiving not less than 10% of the outstanding mortgage indebtedness to effect the sale.
For Newly Constructed Homes: Newly constructed single family residential homes located within the corporate limits of the City of Rockford AND within the RPS 205 District. Undeveloped, currently owned parcels qualify as long as permits are obtained for construction by December 31st, 2017.
To be considered “Owner Occupied” do all of the property owners have to be living in the home as their primary residence?
Details regarding co-ownership should be disclosed in the enrollment form. Any questions should be addressed to the City Finance Director at (779) 348-7470. The program is intended for owner-occupied properties only. If any owner is not going to live at the property, please contact the Finance Director to determine if the property will remain eligible.
When will the program start?
The program applies to any distressed single-family house, townhouse or condo under contract for sale and purchase between January 1st and December 31st of 2017. Properties would be eligible for refunds for three years from the individual taxing bodies that approve the program. The house must close by March 31, 2018 to qualify. New construction may close after the deadline (please see further details in questions that follow).
How do I apply for the Homebuyer’s Property Tax Refund Program?
To be eligible for a property tax refund through the Homebuyer’s Property Tax Refund Program, a program enrollment form, along with copies of required documentation must be submitted to the City of Rockford by January 31, 2018. (Contract for purchase must be executed prior to December 31, 2017). Enrollment forms can be found at www.homebuyerstaxrefund.org (this website), or request a copy from your real estate agent.
Only homebuyer’s enrolled in the program may complete a Refund Request. See Question 9 ('How do I get my property tax refund?') for how to complete a Refund Request.
Please remember that you are filing an enrollment form only. In order to receive a refund, a separate Refund Request will need to be filed each year after you have paid your property taxes in full. No matter what you have been told, or by whom, no decision to pay you a refund has yet been made.
You will submit your completed enrollment form directly to the City of Rockford, either by mail: City of Rockford, Attention Finance Director, 425 E. State Street, Rockford, IL 61104; by email to: email@example.com or in person at City Hall, 3rd floor.
Enrollment Forms filed, emailed or postmarked after January 31, 2018, will not be eligible for processing or refunds.
What if I do not have all the required documentation to turn in with the enrollment form?
Homebuyers closing on the purchase of their property after the January 31st enrollment date may include their fully executed closing statement with their Refund Request.
For new construction, enrollment forms must include copies of building permits obtained for construction of a single family residence obtained by December 31, 2017. The balance of the documentation can be provided with the refund request.
How much of my property taxes will be refunded?
The amount of the refund will vary depending on the participating taxing bodies. Only taxing bodies approving the Program will provide a refund.
As of March, the following taxing bodies have approved the Program:
- City of Rockford
- Rockford Park District
- Rockford School District 205
- Rockford Public Library
How is the tax refund determined?
The City of Rockford Homebuyer’s Property Tax Refund Program is subject to the terms of an agreement as approved by the City of Rockford and multiple tax bodies. The issuance of a tax refund is entirely discretionary and within the sole decision of each taxing body.
Do the properties listed on the program website absolutely qualify for the program?
The properties listed on the homebuyerstaxrefund.org website are a representation of the types of properties that can qualify for the program, but are not guaranteed in its accuracy for qualification. It is the responsibility of the homebuyer(s) to check with the City of Rockford for formal written confirmation that the property they are interested in purchasing will qualify for the program prior to entering into a contract for sale and purchase. Call the City of Rockford Finance Department at (779) 348‐7470 or (779) 348‐7467 to verify that a property you are interested in purchasing qualifies for the program.
How do I get my property tax refund?
Only enrolled homebuyers will be eligible for a property tax refund. See Question 4 ('How do I apply for the Homebuyer's Property Tax Refund Program?') for how to enroll in the Homebuyers Property Tax Refund Program.
After both installments of the property taxes are paid, a Refund Request may be submitted. Refund Requests are being accepted ONLY between June 1st and September 30th during the year in which a refund is due. An application is needed each year.
Within 60 days of the presentation of all required documentation, the City will determine eligibility and provide eligible homebuyers their refunds.
Properties closing in 2017 will have their first refund in 2018. Properties closing in 2018 will have their first refund in 2019.
For new construction, properties are not fully assessed in the year in which construction is completed. For that reason, the program refunds taxes in the first, second, and third year of full assessment. For instance, a home completed during 2017 will not be fully assessed until 2018, and the taxes for 2018 are paid in 2019. For homes completed in 2017, the first refund year will be 2019.
What are the legal or tax implications of participating in this program?
Realtors do not provide legal or tax advice. Homebuyers are advised to consult with their attorney pertaining to their eligibility for the program and preparation of the application for the tax refund. Homebuyers are also advised to consult with their tax professional regarding reporting the tax refund to the IRS.
More information can be found at: http://www.homebuyerstaxrefund.org/#qualify
When should we submit applications?
You should submit your application as soon as you purchase your distressed property or qualify for new construction housing. Enrollment forms are due January 31, 2018. If you wait to submit your application at the same time you pay your taxes in June of 2018, this will be too late.
How do I obtain proof of Short Sale or Foreclosure for my application?
Forms of proof for short sale or foreclosure properties are as follows:
Short Sale – short sale approval letter from the approving bank.
Foreclosure – Title Commitment demonstrating ownership was a financial entity.
You can easily obtain these documents from your Lender or Realtor.
What if the house is located in the City of Rockford but has county taxes? Would that qualify for the tax refund?
The house must be in the municipal corporate limits of the City of Rockford and Rockford Public School District. Simply having a Rockford mailing address does not qualify the house for the program.
I am purchasing an eligible home in 2017 and plan to enroll in the program. If I sell the house in 2018, does the new owner receive the tax refund?
No, only the original buyer is eligible for the refund on the property.
People have suggested I appeal my property taxes because the assessment is higher than what I purchased the home for. Can I appeal my property assessment and still qualify for the Homebuyers Property Tax Rebate Program?
No. If you appeal the property assessment, which determines your property tax bill, you will NOT qualify for a property tax refund through the Homebuyers Property Tax Refund Program.
A former Rockford resident who now lives in out-of-state, wants to buy a property and gift it to his niece. They would be taking title to the property and be responsible for the property tax. Would they be eligible for the refund?
If the buyer has taken title, they would not be eligible. However, if the property is simply under contract the buyer can assign the property to his “beneficiary” and the niece can take title directly form the bank or foreclosure entity, then this is a valid property for the refund program.
A builder wants to build a spec house, but might not have a contract for sale right away. Will this new build house be eligible for the property tax refund?
Permits must be pulled by December 31, 2017 and the enrollment form submitted by the builder or owner by January 31, 2018. The house then has to be built and sold before December 31, 2018. However, a builder on spec takes the risk that if the property is not occupied by a purchaser within the timelines, then the refund will not apply.
Will the focus on selling distressed houses in the market, make it more difficult to sell my home at regular price?
Everyone knows the devastating impact foreclosures caused on the area real estate market. In 2015, Rockford’s distressed homes were selling for 50 cents on the dollar compared to normal (non-distressed) homes. Clearing the foreclosure market as quickly as possible to owner-occupied residences is in everyone’s best interest. Keep in mind that the real estate market does not operate in a vacuum. A $100,000 owner-occupied home for sale is not competing against a $100,000 foreclosure. Even though the price is the same, there are many factors, like the condition of the property, that typically drives a higher property tax bill (which the buyer still has to qualify to pay).
With less income coming into the City of Rockford and the Rockford School District because of this program, will this mean my taxes will go up to cover this loss of income?
In 2015, the average price of foreclosures selling in Rockford was about $47,000, the median $35,000. Most everyone who purchased a foreclosure filed a property tax assessment complaint, reducing their assessed value to their purchase price. While there are some hard costs with this program, as we see success the results will pay great dividends on this relatively small investment.
In terms of new construction, this will be new revenue for the City, School District, Park District and other taxing bodies. Lots already exist and the infrastructure is already in place. The program does not include new subdivisions.
How can I easily verify that the distressed properties I’m looking at are eligible through this program?
You can visit the Winnebago County Treasurer’s website and type in the address of the property. If the house is paying taxes for both the City of Rockford and the Rockford Public School District on the property tax bill, then it will qualify.
I am an investor who wants to buy a single family home that is distressed. Since my renters can help me claim an owner-occupied exemption, can I qualify for the program?
No. Individuals qualifying for the program must live in the home as their primary residence. Proof of residency will be required prior to the issue of any property tax refund.