Gov. JB Pritzker has enacted significant legislation advocated by Cook County Treasurer Maria Pappas aimed at safeguarding homeowners from equity loss in property tax foreclosures.

The statute represents the biggest update to Illinois property tax foreclosure rules in many years. It also aligns the state with the U.S. Supreme Court's 2023 Tyler v. Hennepin ruling, which determined that authorities may retain only the funds required to cover delinquent taxes, penalties and costs.

For decades Illinois property owners who missed tax payments faced the loss of both their homes and any equity built through years of mortgage payments. The prior process allowed tax lien investors to obtain properties and retain the full equity after settling the tax debt, even if that debt was far smaller than the home's actual worth.

The updated statute stops this outcome by directing that any leftover equity after taxes, interest and fees must be returned to the prior owner.

"This measure brings back fairness," Pappas stated. "When a property is lost due to unpaid taxes, the government should take only what is legally due and nothing beyond that. Families should keep the value they built over time instead of seeing it go to a tax buyer under an old system."

The bill, prepared by Pappas' office with contributions from Cook County Board President Toni Preckwinkle, additional county treasurers and housing groups, was introduced by Sen. Celina Villanueva and Rep. Curtis Tarver, both Chicago Democrats.

A major element is the introduction of a tax-deed auction process already used successfully elsewhere. Under this approach taxes, interest and fees are paid from auction proceeds, and any remaining equity goes back to the former owner.

Pappas credited her office's policy team, directed by Policy Director Justin Kirvan, for advancing the measure through the legislature in Springfield.

"Justin and our policy staff tackled this matter with resolve and a clear focus on homeowner protection," Pappas noted. "Alongside our legislative sponsors and advocates statewide, they built the wide backing required to achieve real reform."

The law also starts a shift away from private tax buying in Cook County. After six more tax sales expected to finish by 2030, the county will hold the liens on delinquent properties. Ending the private profit motive should give homeowners added chances to arrange payment plans with the county before any auction occurs as a final step.

The changes aim to better shield neighborhoods and owners by retaining generational wealth, boosting openness and forming a fairer tax collection process that keeps more properties on the tax rolls.

"This benefits homeowners, communities and taxpayers throughout Illinois," Pappas said. "We have updated a system long in need of revision while ensuring local governments receive necessary revenue. It is a balanced solution that serves both taxpayers and the public good."

SOURCE Cook County Treasurer Maria Pappas