What Happens If I Don't Pay Property Taxes in Illinois?

All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. In Illinois, the main types of tax sales to collect delinquent property taxes are:

• Annual sales. If property taxes for the immediately preceding tax year are delinquent on a parcel, they're offered for sale at the annual tax sale.
• Scavenger sales. Another kind of tax sale—a scavenger sale—is for properties that have delinquent taxes for three or more years, which weren't purchased at an annual tax sale. (35 Ill. Comp. Stat. Ann. § 200/21-145).
• Forfeiture sales. Forfeiture sales are when no one bids at the sale, so the lien for taxes goes to the state, and then someone buys the forfeited lien from the county.

This article focuses on procedures related to the annual tax sale.

How Property Taxes Work

People who own real property have to pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value.

If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien is a claim against your home to ensure you'll pay the debt; it effectively makes the property act as collateral for the debt.

Again, all states, including Illinois, have laws allowing the local government to sell a home through a tax sale process to collect delinquent taxes.

How Does Illinois Handle Property Tax Non-Payment?

When an Illinois homeowner doesn't pay the property taxes, the overdue amount becomes a lien on the home. The lien exists from and including the first day of January in the year in which the taxes are levied until the taxes are paid or until the property is sold at a tax sale. (35 Ill. Comp. Stat. Ann. § 200/21-75).

How Tax Sales in Illinois Work

When you don't pay your property taxes in Illinois, the county collector can apply to the court for a judgment against the property for the taxes and costs, as well as an order of sale. If you don't get caught up on what you owe, the court will issue a judgment, and then the county collector will hold a sale to sell the delinquent tax debt. (35 Ill. Comp. Stat. Ann. § 200/21-190).

But the purchaser at the sale doesn't buy the title to the home. Instead, the buyer gets a certificate of purchase, which represents a lien on the property. (35 Ill. Comp. Stat. Ann. § 200/21-250).

Notice Before the Judgment and Sale

No less than 15 days before applying to the court for a judgment and order of sale, the county collector must mail you a notice about the application. (35 Ill. Comp. Stat. Ann. § 200/21-135). The collector must also publish notice of the application in a newspaper before applying for the judgment. (35 Ill. Comp. Stat. Ann. § 200/21-110, § 200/21-115).

Stop the Sale By Getting Caught Up

At any time on or before the business day immediately before the sale, you can pay the taxes and costs due, which will stop the sale. If you live in a county with 3,000,000 or more residents, you'll have to pay the taxes, special assessments, interest, and costs due. (35 Ill. Comp. Stat. Ann. § 200/21-165).

How the Right to Redeem Usually Works

Many states give delinquent taxpayers the chance to pay off the amounts owed and keep the home. This process is called "redeeming" the property.

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.

In other states, though, the redemption period happens before the sale.

How Long Is the Redemption Period After an Illinois Tax Sale?

In Illinois, if the property has a dwelling of six or fewer units, the redemption period is two years and six months after the sale. (35 Ill. Comp. Stat. Ann. § 200/21-350).

Reduced Redemption Period for Abandoned Homes

If the property is abandoned, the purchaser can ask the court to reduce the redemption period to two years after the sale date. (35 Ill. Comp. Stat. Ann. § 200/21-350).

Extended Redemption Period

The purchaser from the tax sale can choose to extend the redemption period up to three years after the sale. (35 Ill. Comp. Stat. Ann. § 200/21-385).

If the period of redemption is extended, you must redeem on or before the extended redemption date. (35 Ill. Comp. Stat. Ann. § 200/21-350).

How Much Will It Cost to Redeem My Home in Illinois?

To redeem the home, you'll have to pay various amounts, including:

• the certificate amount (including all taxes, special assessments, interest, penalties, costs, and applicable fees)
• an accrued penalty that's based on the date you redeem (the penalty increases every six months, which means the longer you wait to redeem, the more you'll have to pay)
• the total of all subsequent taxes, special assessments, accrued interest on those taxes and special assessments, and costs that the purchaser paid, plus a penalty, and
• fees and costs that the purchaser paid in connection with filing a petition for a tax deed with the court. (35 Ill. Comp. Stat. Ann. § 200/21-355).

What Happens If You Don't Redeem the Home

If you don't redeem your Illinois home during your allotted redemption period, the purchaser can get a deed (title) to the property. The purchaser files a petition with the circuit court asking that the court direct the county clerk to issue a tax deed if the property isn't redeemed from the sale. (35 Ill. Comp. Stat. Ann. § 200/22-30).

The circuit court will then enter a judgment ordering a tax deed in favor of the purchaser so long as all legal requirements for obtaining a deed are met, including:

• preparing a notice of sale, which includes information about your right to redeem, within four months and 15 days after the sale (for the county clerk to mail to you) (35 Ill. Comp. Stat. Ann. § 200/22-5), and
• serving you a notice containing the redemption period expiration date (and publishing the notice in a newspaper) at least three months—but not more than six months—before the expiration date. (35 Ill. Comp. Stat. Ann. § 200/22-10, § 200/22-15).

What Options Do I Have If I Can't Afford to Pay My Property Taxes in Illinois?

Even though you'll get a redemption period after an Illinois tax sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable.

You could, for example, find out if you meet the criteria for a property tax exemption or try to reduce the amount of taxes that you must pay by challenging the taxable value of your home (if you think the valuation is too high).

Getting Help

If you're already facing a property tax sale in Illinois and have questions (or need help redeeming your property), consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.