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Property Tax Reversion Act

Gone are the days when a property owner could be three years behind on his/her property taxes. Public Acts 123, 132, 133 and 134 of 1999 have cut the tax reversion process in half. It previously took about six years to complete the tax delinquent property reversion process, which was designed to give people ample time to redeem their property by paying their delinquent taxes. This lengthy process created several problems:

  • The system was unfair to those who paid their taxes on time, because they subsidized the costs of local government for those who were delinquent.
  • The lack of revenue impacted the operations of local governments.
  • Tax delinquent properties are not maintained and could cause blight in some areas. Usually there is trash/rubbish left and the lawn is not maintained.
  • The process could hamper land acquisition and redevelopment projects.

A series of public acts has now amended the General Property Tax Act to halve the time necessary to foreclose and sell tax delinquent properties from six (6) years to three (3) years. The major objectives of these acts are to stabilize at risk neighborhoods and preserve open space by keeping existing properties in active use. The following information summarizes the new reversion process, which is effective for all property taxes levied after December 31, 1998:

  • Property taxes that are not paid by March 1 in the year immediately following the tax levy automatically trigger a delinquent status.
  • On December 31 in the year immediately following the tax levy, the property is forfeited to the County Treasurer, and administrative fees are added to the outstanding tax bill.
  • Foreclosure itself occurs in March of the second year immediately following the tax levy, at which time all liens on the property are extinguished, and the County Treasurer or the State receives fee simple title.
  • Once the property has reverted to the County or the State, the sale of the property can proceed in July of the second year immediately following the tax levy.

There are usually five notices of delinquent status sent, with the last notice served by a process server. Once served, the delinquent taxes have to paid within 21 days or eviction follows.

Land contract holders need to check to make sure their buyers have paid the taxes or both the contract holder and the buyer could lose the property. Please check with fixed income relatives and friends who have trouble paying their taxes to make sure they understand the new law so they don't lose their home.