Plans are underway to get rid of Cook County’s property tax sales in the coming years

Plans are underway to sunset Cook County’s contentious property tax sale system in the coming years.

Last week, state Sen. Celina Villanueva filed a bill to bring Illinois into compliance with a 2023 U.S. Supreme Court ruling that deemed it unconstitutional for property owners to lose the surplus equity they are entitled to once their property has been foreclosed due to delinquent taxes and after the debt has been paid.

Villanueva did not immediately respond to requests for comment.

Under the current system, if property taxes are unpaid, Illinois law allows counties to sell those tax certificates at an annual tax sale to recoup the revenue they hoped to get from property taxes. Investors, or tax buyers, buy the certificates, and tack on fees and interest that property owners must redeem, or pay, in order to keep their property.

If property owners don’t pay within two-and-a-half to three years, tax buyers can go to court and pursue the deed of the property to make back what they paid. That’s where the issue lies. Properties could have equity far greater than the amount of the delinquent taxes, and the courts have ruled that property owners are entitled to it, according to the United States Constitution. But with the way things are now, investors get that equity after a tax foreclosure because they possess the deed. Property owners often have to vacate the property.

Under the new system, in lieu of a tax sale, property owners will still have three years to settle their property tax debt. However, if they haven’t by that time, “the county would have to petition the court for a tax deed, and that property would get looped through a foreclosure auction to the highest bidder,” according to Justin Kirvan, the policy director in the Cook County Treasurer’s office.

Everyone, including the property owners, can bid in the auction. The minimum bid would be set at the amount of the delinquent taxes owed to the county, Kirvan said.

The legislation is powered by a coalition of housing advocates called the Tyler v. Hennepin Coalition, to lead the charge of ensuring that Illinois complied with a Supreme Court ruling under that same case. The group includes the Cook County Treasurer’s Office, the Cook County President’s Office, the Chicago Community Trust, Housing Action Illinois, Neighborhood Housing Services, and AARP.

“This legislation, at minimum, will have protections in place for folks who are the most vulnerable to ensure their equity is still protected in a tax sale,” said Torrence Gardener, manager of policy change at the Chicago Community Trust. “Justice is definitely needed at this time.”

Illinois is the only state that has not yet formally changed its property tax sale rules to align with the Supreme Court ruling, according to Kirvan. And there have been consequences. In a December 2025 ruling of Kidd v. Pappas, U.S. District Judge Matthew F. Kennelly issued a summary judgment that Cook County’s “tax sale procedures violate the Fifth and Eighth Amendments” of the United States Constitution. The case is a class-action lawsuit starting with a west suburban Maywood homeowner who lost her home in a tax foreclosure sale, and did not receive the surplus equity that was owed to her.

SB 3940 will effectively impact the investors’ interest in the tax sales, and Kirvan believes they may not favor the legislation.

“I think tax buyers would view this remedy as impacting their profits negatively because they won’t be able to take tax deeds free and clear with any equity that comes with the deed any longer under this legislation,” Kirvan said.

In a statement from the Illinois Tax Purchasers Association, the group said it recognizes “the ongoing discussion around potential changes to Illinois law following Tyler v. Hennepin County and looks forward to continuing to work with Senator Villanueva, Representative Tarver, and other stakeholders on thoughtful, workable solutions.”

State Rep. Curtis Tarver is the chairperson of the Illinois House Revenue & Finance Committee.

The December judgment for Kidd v. Pappas suggests that counties could be on the hook to pay the surplus equity owed to property owners. Experts say the tax auction is the best play for Cook County to “protect themselves against future liability,” according to Matt Kriese, general counsel for the Center for Community Progress, a national nonprofit that helps restore vacant and abandoned properties to productive use in communities. However, Kriese said that the county should “have a robust series of tools to be able to keep [property owners] out of [the tax sale] pipeline.”

“The fact that somebody could lose their home because they’re unable to pay their property taxes is a terrible outcome that we want to do everything in our power, I think, to prevent,” Kriese added.

While the legislation makes its way to the floor, there is still the issue of this spring’s anticipated tax sale. Last year, when Springfield legislators filed proposals to make the state’s tax sale system compliant with the Supreme Court ruling, they also postponed last year’s tax sale until March 2026. However, even if the legislature swiftly passes this bill, the county's tax offices and courts will need time to implement the new rules, according to Kirvan.

Kirvan’s position is that the March 2026 tax sale must be postponed. “We are doing all we can to persuade the General Assembly to amend the statute that currently requires the sale to be held in March,” he said.

While the bill will address some immediate needs, the road to reform continues. On Feb. 25, the Supreme Court will hear another case about a central Michigan property that was sold in a foreclosure auction due to delinquent property taxes. In Peng v. Isabella County, the plaintiffs argue that the surplus equity they received after the auction sale was less than the equity they were due based on the value of the home.

In response, Kirvan said, “our read of that is that in the foreclosure context, the winning bid at an auction like this is a court-sanctioned way of determining the fair market value of the property again within the foreclosure context.”