Illinois Tax Liens & Deeds

State Website: http://www.illinois.gov/Pages/default.aspx

Illinois State Overview

Illinois utilizes a tax lien certificate system to collect delinquent property taxes. The state rate of return is set at 18% interest; however, bidders compete through a process of bidding down the interest rate. Illinois also conducts what is called a Scavenger Sale. These tax sales are for delinquent properties that were not sold during the annual sale. Scavenger Sales are the state’s alternative to offering over-the-counter tax lien properties. Illinois is an oral bid state. Illinois requires a preregistration along with a deposit at least 10 days before the auction. Counties usually publicly announce the sale about a month prior to the sale.

Illinois uses a Premium Bid method. The county sets the tax lien amount, and bidders compete by lowering the interest rate of return. The investor willing to accept the lowest amount of interest is rewarded the lien.

A 2-year redemption period is typically the standard in Illinois. The owner of the tax lien certificate has the option to extend the redemption period to 3 years from the date of the sale.

Illinois is unique in that it holds two types of tax sales; Regular tax sales and Scavenger tax sales.

Regular Tax Sales consist of properties which were delinquent the previous year. Bidding begins at 18% and tax lien certificates are sold to the bidders willing to accept the lowest rate. The property owner has up to three years to exercise his or her right to redeem the property.

Scavenger Tax Sales consist of properties which were delinquent for two or more years. According to (Sec. 21-260) the ‘minimum bid for any property shall be $250 or one-half of the tax if the total liability is less than $500.‘

Penalty rate: The person at the sale offering to pay the amount due on each property for the least percentage shall be the purchaser of that property. No bid shall be accepted for a penalty exceeding the maximum of 18% (Sec. 21-215). For Regular Tax Sales, the penalty percentage is then computed through the date of redemption as a percentage of the certificate amount (Sec. 21-355)

Attaining a Tax Deed: At any time within 5 months but not less than 3 months prior to the expiration of the redemption period for property sold pursuant to judgment and order of sale under Sections 21-110 through 21-120 or 21-260, the purchaser or his or her assignee may file a petition in the circuit court in the same proceeding in which the judgment and order of sale were entered, asking that the court direct county clerk to issue a tax deed if the property is not redeemed from the sale. The petition shall be accompanied by the statutory filing fee.

Notice of filing the petition and the date on which the petitioner intends to apply for an order on the petition that a deed be issued if the property is not redeemed shall be given to occupants, owners and persons interested in the property as part of the notice provided in Sections 22-10 through 22-25, except that only one publication is required. The county clerk shall be notified of the filing of the petition and any person owning or interested in the property may, if he or she desires, appear in the proceeding.

You must record your Tax Deed: Unless the holder of the certificate purchased at any tax sale under this Code takes out the deed in the time provided by law, and records the same within one year from and after the time for redemption expires, the certificate or deed, and the sale on which it is based, shall, after the expiration of the one year period, be absolutely void with no right to reimbursement. If the holder of the certificate is prevented from obtaining a deed by injunction or order of any court, or by the refusal or inability of any court to act upon the application for a tax deed, or by the refusal of the clerk to execute the same deed, the time he or she is so prevented shall be excluded from computation of the one year period. Certificates of purchase and deeds executed by the clerk shall recite the qualifications required in this Section (Sec. 22-85).