Falling behind on property taxes is stressful, but it doesn't automatically mean you lose the house. Here is a general overview of how delinquent property taxes work in Illinois and how they are usually handled when a house is sold. It is not legal advice.
How Illinois property taxes are billed
Illinois property taxes are paid in arrears, so the bill you pay this year is for the prior tax year. In Winnebago County the bill is usually split into two installments. When an installment is late, Illinois law adds interest, generally 1.5% per month on the unpaid amount.
What happens if taxes stay unpaid
- Annual tax sale. Taxes that are still unpaid are offered at the county's annual tax sale. A tax buyer pays the taxes and gets a certificate; the owner still owns the house.
- Redemption period. The owner can redeem by paying the delinquent taxes plus interest, penalties and costs through the County Clerk. For most homes the redemption period is roughly two to two and a half years from the sale, depending on the property, and it can sometimes be extended.
- Tax deed. If the taxes aren't redeemed in time, the tax buyer can ask the court for a tax deed, which can transfer ownership. Owners should receive notices before this happens. Take them seriously.
Selling a house that has back taxes
You can usually still sell a house with delinquent taxes. At closing, the title company pays the unpaid taxes (or the redemption amount if the taxes were sold) out of the sale proceeds, so the buyer gets clear title. What's left after taxes, any mortgage and closing costs goes to you.
Timing matters. The longer taxes go unpaid, the more interest and costs are added, and the closer the redemption deadline gets. If you're behind and thinking about selling, it's better to start early.
Where to check your status
- The Winnebago County Treasurer's office can tell you current and past-due amounts.
- The Winnebago County Clerk handles redemptions for taxes that have already been sold.
- Boone and Ogle counties have their own Treasurer and Clerk offices with similar roles.
Want a cash offer?
Daugherty Property Holdings, LLC buys houses as-is in Rockford, Winnebago, Boone and nearby Ogle County. Request a no-obligation offer or call (815) 706-3985.
Other guides: Selling an inherited house in Illinois · Selling a house as-is in Rockford