SPRINGFIELD, Ill. - An Illinois state senator is proposing sweeping reforms to the state’s property tax sale system, arguing current practices favor investors at the detriment of homeowners and communities.
Sponsored by Sen. Willie Preston, D-Chicago, whose district includes several westside neighborhoods, SB 2830 could change how delinquent property taxes are sold, refunded and reviewed with the goal of reducing real estate speculation and predatory behaviors of development investors which have priced out homeowners over relatively small tax debts.
During a news conference in Springfield, Preston told reporters that the system itself is the problem in Illinois, arguing that equity is being extracted from distressed communities by professional investors who use the Illinois tax sale system to effectively displace homeowners.
“What this bill does is replace exploration with fairness,” Preston said. “Too often the people hurt by the current system are seniors on fixed incomes, communities are destabilized and generational wealth disappears.”
Under current Illinois law, when a homeowner falls behind on property taxes, the county may offer the delinquent tax bill for sale at a public auction. Investors can then purchase those tax liens and later collect repayment, plus statutory interest, during a defined redemption period.
If the lien is not redeemed in time and all procedural requirements met, the investor can obtain a tax deed and take ownership of a property.
“This is about ending risk-free speculation,” Preston said. “We should not have a system where families lose generational wealth while investors are guaranteed profits.”
Under the new proposal, investors would no longer receive interest on refunds caused by county errors, or have their reimbursements capped at 6 percent. The bill also places a $2 million annual cap on purchaser refunds.
According to Preston, a central provision of the bill caps so-called “sale-in-error” refunds - which are payments made to tax buyers when a sale is invalidated due to a government mistake - such as improper notice or inaccurate assessments.
Additionally, tax buyers would be required to absorb no less than 10 percent of a purchase price should a sale be invalidated for reasons that could have been identified through routine due diligence.
The changes are designed to shift risk from homeowners to investors while discouraging predatory speculation at the institutional level.
The new legislation would require officials - including assessors, treasurers and clerks - to certify that homeowner properties are officially eligible before being listed at tax sale auctions. Further directions include requiring the state treasurer to publish public reports that identify sale-in-error refunds.
As the effort awaits a committee hearing, Preston says he plans to work with local government, housing advocates and other community stakeholders to see if the bill moves forward.
“We need a system that collects taxes without destroying neighborhoods in the process,” said Preston, who is running for congress in the 2nd District.
For now, the new bill is part of a batch of legislation starting off the spring legislative session highlighting growing debates in Illinois over whether the tax sale system is primarily a tool for revenue collection or a driving force of displacement in communities which are already struggling with vacancy, declining investment and relocating businesses.
In recent years Illinois has seen several efforts to reform its property tax sale system. Public Act 103‑0555 reduced interest rates on delinquent taxes and curtailed repetitive tax sales - moves designed to prevent homeowners from losing equity unnecessarily.
In 2025, lawmakers introduced HB 3146 to ensure surplus equity from tax sales would be returned to homeowners, and that counties were given more flexibility to postpone annual tax sale auctions.
Other lawmakers, including Cook County Treasurer Maria Pappas, have also criticized the tax-sale-system for favoring investors over families and neighborhoods.