In a significant move for homeowners across Illinois, the state’s General Assembly has passed a landmark property tax reform bill led by Cook County Treasurer Maria Pappas. The legislation, House Bill 4537, now awaits the signature of Governor JB Pritzker to become law.

Protecting Homeowners’ Equity

This reform comes in response to the 2023 U.S. Supreme Court ruling in Tyler v. Hennepin, which mandates that any equity above the debt owed must be returned to the property owner when governments foreclose on properties for unpaid taxes. Under the current Illinois law, overdue taxes on properties are sold to tax buyers, who can claim the property and its equity if the owner fails to pay within a specified period.

The new legislation aims to overhaul this system by ensuring that any surplus equity is returned to the former property owner. This change was developed with input from Cook County President Toni Preckwinkle, downstate county treasurers, housing advocates, and state legislators including Sen. Celina Villanueva and Rep. Curtis Tarver, both from Chicago.

A Fairer System for Families

Maria Pappas emphasized the importance of this bill in protecting families from losing their homes and the equity they have built over the years. “For too long, families who fell behind on their taxes risked losing not only their homes, but all the equity they spent years building. This legislation creates a fairer system that protects homeowners, taxpayers, and taxing districts alike,” she stated.

The core reform introduces a tax deed auction system, already successful in other states, where taxes, interest, and fees owed are paid by the highest bidder, and any remaining equity is returned to the property owner by the county treasurer.

Ending Private Tax Buying

The legislation also mandates that Cook County hold six more tax sales involving private tax buyers before phasing out this practice by 2030. Afterward, the county will manage all liens for overdue property taxes, offering payment plans with reduced interest rates to help struggling homeowners before auctioning the property deed.

While other counties in Illinois can adopt this phaseout, they are not required to do so. Pappas highlighted the bill’s potential to prevent families from losing generational wealth due to temporary financial hardships.

Original reporting: KTBS 3 (Shreveport) — read the source article.