State Summary

• Tax Collection Method: Liens
• Primary Bidding Type: Bid-down Interest
• Redemption Period: 30 months for owner-occupied residences; 24 months for unoccupied residences or vacant land; 36 months for residential property with six or more units; 6 months for vacant land at a scavenger sale
• Redemption Interest Rate/Flat Penalty: 18% (maximum) flat penalty;  additional flat penalties are assessed and added to the delinquent tax bill each six-month period that elapses during the redemption period

The following information summarizes the life cycle, requirements, and administering of tax liens in the state of Illinois. Please read this information carefully. There are tax collection laws that pertain to all counties in Illinois, but be aware that there are subtle differences between the counties as well. When the word "typical" is used in the FAQs below, it indicates that most counties use this procedure/follow this convention, but not all counties.

Is Illinois a tax lien or a tax deed state?
I would consider Illinois a tax lien state, although foreclosed tax deeds for 81 of Illinois' 102 counties are offered for sale through a third party. These tax deed auctions are often called "Surplus" or "Trustee" auctions and they are either done by
sealed bid or a premium bidding public outcry auction.

What is the name of the county official whom typically collects property taxes in Illinois?
Treasurer.

When are property taxes due in the state of Illinois?
The property taxes are due in two installments. For most counties, the first installment is due the first business day in June, and the second installment is due the first business day in September. In large Illinois counties, such as Cook County, the first property tax installment is due the first business day in March. The second property tax installment may vary year to year since the second installment is dependent on the delivery on various sets of data from other state and county agencies. The second property tax installment is announced to taxpayers as soon as it is known. The second property tax installment due date was December 1 in 2009.

When do property taxes become delinquent in the state of Illinois?
Property tax payments postmarked later than the two due dates are considered delinquent. A delinquency charge of 1.5% per month (or fraction of a month) is added to the tax bill until the full amount due is settled.

What is the name of the county official whom typically conducts tax lien sales in Illinois?
County Clerk.

When does the typical Illinois county hold their annual tax lien sale?
The annual tax lien sale for most Illinois counties is held in the fall sometime after the second property tax installment due date. Generally, the sales are in late October or November. Larger counties, including Cook and Marion counties, hold a "Scavenger Sale" in odd-numbered years. Properties in Scavenger Sales have generally been offered for sale at two or more annual tax lien sales. Scavenger Sales generally take place in the late Fall or early Winter months.

What are the registration requirements for the typical Illinois tax lien sale?
Most Illinois counties require pre-registration no later than 10 days before the sale date. Bidders must complete a Bidder Registration Form and include a deposit with their registration. The deposit amount can be as high as $500 and is applied toward any purchases made at the sale. Any or all of the deposit is refundable if the bidder's purchases are below this amount after the sale. The bidder must attend the sale to be eligible for any refund.

What is the bidding type used at a typical Illinois tax lien sale?
The bid-down interest method at a public outcry auction. All offered tax liens start at 18% interest, and then the interest rate is bid down. The bidding increment (0.25%, 0.5%, 1%) will vary based on the county. The winning bidder is the investor willing to purchase the tax lien certificate at the lowest interest rate. The "winning" interest rate is actual a flat penalty that will assessed and added to the delinquent tax bill.

Illinois counties often refer to redemption period interest as the interest rate, but it is actually a flat penalty. So, if you purchase a tax lien certificate at 10%, this 10% is assessed on the face value of the tax lien certificate immediately, so investors get a 10% return on their investment even if the property owner redeems the property the day after the sale.

What forms of payment are generally accepted at a typical Illinois tax lien sale?
Cash, cashier's check, bank checks, business checks, or money orders. Some counties accept personal checks backed by a bank letter.

What are the general terms of payment for the typical tax lien certificate purchased at an Illinois tax lien sale?
Generally, full payment is required the day of the sale. Most counties require a deposit at the time of registration and this amount is applied toward any purchases.

What is the maximum return (interest rate and/or flat penalty rates) investors earn while they hold the tax lien certificate?
If a tax lien certificate is purchased at the maximum allowable 18% penalty rate, and is redeemed between 30 and 36 months after the sale, the return would be an astronomical 108%. Of course this means you would more than double the amount invested. This is the best case scenario. Note that a three-year redemption period is only applicable for properties with six or more units.

Here is the penalty schedule for tax lien certificates that are redeemed before the end of the 36-month redemption period:

What is the redemption period for tax lien certificates in Illinois?
The redemption period for tax lien certificates varies based on the type of property. The redemption periods are summarized below:

• Residential properties with six or more units: 36 months
• Owner-occupied residences: 30 months
• Unoccupied residences or vacant land: 24 months
• Vacant land at a Scavenger Sale: 6 months

Are tax liens certificates offered "over-the-counter" in Illinois?
Some Illinois counties offer "over-the-counter" tax lien certificates. These tax lien certificates are also called "Forfeited Lands". The penalty rate for over-the-counter liens is initially set at 12%, and then the penalty rate follows the same penalty schedule used for tax lien certificates sold at an annual auction.

What is the name of the local official whom typically determines the values of properties on a annual basis?
The Township Assessor. Township Assessors work in conjunction with the County Assessment Office.

Does the typical Illinois county feature a Geographic Information System (GIS) application on their Web site?
A lot of Illinois counties have GIS applications available on their Web sites. GIS applications can be very useful for tax lien and tax deed investors because most of them feature aerial photos (some with zooming options), and a lot of them are integrated with tax bills and assessor/appraisal records, which simplifies the task of researching properties online.

For more information on the statutes regarding property tax collection, tax liens, and tax deeds in the state of Illinois, refer to the Property Tax Code section of the Illinois Compiled Statutes. In particular, refer to Title 7 - Tax Collection in the Property Tax Code.

Illinois County Reference