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Expert Interview on the Illinois Tax Sales with John Stanko

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Tax Sale Resources
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Click to download the full white paper about the Illinois Tax Sale Process by John Stanko.

Introduction

John Stanko goes into full detail concerning Illinois tax sales, tax certificates, redemptions, tax deeds, and indemnity fund proceedings in his white paper.  All of the statutes controlling these processes are housed in 35 ILCS 200/1-1 of the Illinois Tax Code.  For the purposes of this summary, it will focus on the tax sale/certificate process specifically.

Interview Summary

Illinois has three types of delinquent property tax collection sales and the state also allows for tax certificates to be assigned.  A certificate holder is called a “tax buyer or tax purchaser.”  Here is a truncated list of points from John Stanko’s interview and paper.

Three types of sales:

  1. Annual Sales–There is a two year gap between the year of delinquencies and when the sale takes place.  For example, in 2022 the 2020 taxes are being collected and offered at sale (this is different from most states).  The annual sale is the first offering of the property tax delinquency.  This is a bid down percentage rate state, which starts at 9% (effective 1-1-22) per six months (with a maximum of 18% per year).
  2. Forfeiture Sales–If the parcels at the annual tax sale are not purchased, they are forfeited to the state and an interested purchaser may contact the County Clerk to purchase over the counter.  All past delinquencies and penalties must be purchased at this time.  There is a 12% penalty per six months applied once purchased that must be paid back upon redemption (this is the amount earned).
  3. Scavenger Sales–Once a parcel is three or more years delinquent, it is then offered at a scavenger sale which only take place every other year.  There is a minimum bid set and purchasers must bid up the premium from that point.  There is a structured penalty applied to those parcels purchased at scavenger sales but no penalty is applied to the overbid amount.  The penalty is “12% per six months or fraction thereof for the first 24 months (except that the penalty is only 3% if the property is redeemed within two months from the date of sale), and 6% per year thereafter.”

Redemption periods vary in the state of Illinois depending upon the type of property purchased by the tax buyer.  

  1. Any interested party in a property has the right to redeem the tax purchase.
  2. Dwelling of six or less units=2 years and 6 months
  3. Vacant, non-farm, or dwelling with seven or more units, commercial, or industrial=6 months
  4. All other property types=2 years
  5. A tax purchaser may request an extension on the redemption period of up to three years from the date of sale.

Conclusion

Tax deed proceedings are the last step in the tax certificate purchase process in Illinois.  For the detailed information on this process, please read John Stanko’s white paper.  Noticing interested parties is just one step to the tax deed foreclosure process and timeliness on all the steps is key, so consulting an attorney is advised.

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