SPRINGFIELD — A major property tax relief package intended to give Illinois residents tangible tools to stay financially secure has passed the Senate with support from State Senator Robert Peters.

“This measure is about fairness and compassion for our most vulnerable residents,” said Peters (D-Chicago), who chaired the Property Tax Payment Plan Task Force in 2024. “Rising property taxes shouldn’t force seniors or families out of the home they’ve worked their whole lives to afford, and this bill would ensure they don’t.”

Senate bill 642 would deliver critical updates to help seniors on fixed incomes and help families facing economic challenges manage rising property tax costs. Under the measure, the maximum income limit for the Low-Income Senior Citizens Assessment Freeze Homestead Exemption would increase substantially over the next several years, beginning at $75,000 for taxable year 2026, increasing to $77,000 for taxable year 2027 and settling at $79,000 for taxable year 2028 and beyond.

To address gentrification issues, it would also add an occupancy requirement, stating seniors must have owned and lived in their home for at least three years. This expanded threshold would allow thousands of additional seniors across Illinois to qualify for the property tax freeze – helping them stay in their homes and maintain financial security as the cost of living continues to rise.

The bill would also create a new property tax repayment plan, giving counties the authority to establish structured payment options for homeowners with unpaid taxes. For the 2025 tax year, unpaid taxes would begin accruing interest at a reduced rate of 0.75% per month after Apr. 1, 2026, providing taxpayers more time and flexibility to meet their obligations without facing harsh penalties. Under the Senior Citizens Real Estate Tax Deferral Act, counties would be able to offer payment plans during the redemption period and waive interest penalties for participants who comply with their plan’s terms – making it easier for older adults to recover from temporary financial setbacks.

“For many older adults living on fixed incomes, even a small increase in property taxes can be the deciding factor on if they get to keep or lose their home,” said Peters. “The expansion of the Senior Freeze and the new repayment options show we in Illinois are listening to the needs of our residents and taking the necessary steps to protect our homeowners.”

Senate Bill 642 passed the Senate Friday and heads to the governor for further consideration.