Tax Lien FAQ
June 14, 2007
How Tax Sales Works in Illinois (IL) - a quick summary
The below is a quick overview of how the tax sale works in Illinois... (I'm still investigating all the details and will soon post more.)
By Illinois law, the maximum interest rate bid is 18%. The sale is to the investor who bids the lowest percentage of interest. This percentage represents the interest rate that would be earned by the taxbuyer (investor) on the purchase amount during each six months of the redemption period, if the property owner redeems the delinquent tax. After the tax sale, the taxbuyer is issued a certificate of purchase (tax lien certificate), which represents a lien on the property. The property owner has a 2 to 2 ½ year to redeem, depending on property classification. If the tax lien is not redeemed by the owner, the taxbuyer must petition the Circuit Court for a tax deed, after first fulfilling all of the legal requirements. The investor may (I'd say should) also pay all unpaid taxes for the next two subsequent years at a specified time and record the payments against the tax sale. In cases where there are no bidders on a property, the IL County, as Trustee for all taxing bodies, becomes the taxbuyer at 18%. The County’s lien certificates are available for purchase by taxbuyers in the amount that the County paid, along with the 18% interest.