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The Basics

So what is a tax lien?  Wikipedia defines a tax lien as a lien imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes.  In Illinois there are tax liens on both real estate and mobiles homes.  A property tax lien is generally imposed by the county treasurer for delinquent property taxes owed to the county.  Property taxes are generally paid in two installments.  The first installment usually falls in or around June and the second installment around August or September.  Please note that depending on many possible situations these dates may vary greatly.  The important thing to know is that a tax lien can’t be sold until the actual property taxes become delinquent. 

Tax sales in Illinois generally occur in the October or November following the first and second installments.  The tax sale is an auction held by the county treasurer of each county in Illinois in an effort to collect any unpaid property taxes.  Tax lien investors attend the sale and purchase these unpaid property taxes, securing a lien against the property.  The tax lien investors in Illinois bid against each other for the penalty rate they will receive on the lien.  Illinois State Law states that penalty rates must be between 0 and 18 percent.  Bidding starts at 18 percent and moves downward usually in 1 percent increments.  It is important to note that this is a penalty rate for a six month period.  The tax lien purchaser who bids the lowest wins the bid.  After the tax sale the tax lien purchasers are presented with tax lien certificates by the county clerk.  These certificates contain information like penalty rate, face amount, current assessee (owner), and property address.  All redemptions by delinquent tax payers must be made to the county clerk.  Once the county clerk receives the necessary amount to redeem they will cancel the certificate lifting the tax lien against the property.

This is a very simplified version of how property tax liens work in Illinois.  There are many legal requirements that tax lien purchasers must complete in order to ensure their interest in the properties they hold liens against remain secure.



Recent Tax Lien Articles


I’m a serious tax buyer…

If you’ve ever sent a letter that starts like this i can guarantee you are one of the many who have become prey for the hundreds of people out there promising to make you rich buying tax liens.  Most books or seminars only give broad definitions of how tax liens work and then supply a form letter so that you may send it to the county treasurer to obtain the exact details of how the tax sale procedures work in that county.  Save your money!!!  If you are really interested in purchasing tax liens read the Illinois Property Tax Code and hire a qualified real estate attorney to explain it to you.  For those of you who purchased the book and haven’t gotten around to mailing the letters I’ll save you the trouble and give you the answers now.

Illinois Internet Tax Sales - Do they exist???

There are currently no Internet Tax Sales conducted in Illinois although many counties do employ an automated bidding system.  Illinois law states that you must be present at the tax sale to bid.  While many new tax buyers may feel that Internet bidding is the way to go there are many major issues and concerns county collectors across the state will have to consider before opening up Illinois Tax Liens to the world wide web.

Why Buy Illinois Tax Certificates at 0%

In numerous counties around Illinois professional tax buyers have been purchasing thousands of tax lien certificates at 0%.  This has completely baffled all of the new tax buyers and others in the industry.  Before you start buying at 0% you need to know the possible strategies the pros are putting in place.