O VERVIEW : A NNUAL AND S CAVENGER P ROPERTY T AX S ALES Office of - PowerPoint PPT Presentation

O VERVIEW : A NNUAL AND S CAVENGER P ROPERTY T AX S ALES Office of Cook County Treasurer Maria Pappas October 3, 2012

S UMMARY  Property Tax Cycle Overview  Annual Tax Sale  Scavenger Tax Sale 2

P ROPERTY T AX C YCLE O VERVIEW  Treasurer’s Office Annual Property Tax Duties  Bill  1.7 million parcels  Collect  $11 billion  Distribute  2,200 taxing agencies  Billing Cycle  Taxes billed twice a year in 2 installments  Taxes billed and collected in current calendar year are for prior calendar year 3

P ROPERTY T AX C YCLE O VERVIEW  Tax Billing Example – Tax Year 2010  Billed and Collected in 2011  1 st Installment Due 4/1/11  2 nd Installment Due 11/1/11  Annual Tax Sale in 2012  8/3/12 to 8/8/12  After Annual Tax Sale is conducted, Cook County Clerk responsible to produce any tax bill for tax year 2010 4

A NNUAL T AX S ALE  Sale of delinquent taxes of most recent tax year that takes place typically is 7 to 9 months after 2 nd installment due date  Tax Buyers are purchasing delinquent taxes, NOT the actual property  Purchase of delinquent taxes results in a tax lien on the property which may result in the tax buyer acquiring title to the property  Property owner has several opportunities to pay (redeem) sold taxes and satisfy the tax lien  Typically 6 months to 2-year period before a tax buyer can file in court and be issued a deed to the property 5

A NNUAL T AX S ALE  Purpose of the Annual Tax Sale is to collect the full amount of any delinquent taxes due on the parcel for the tax year being sold for distribution to the agencies  Rules of sale dictated by Illinois statute  Tax Buyers must pay:  Delinquent taxes due  Interest on delinquent taxes  Certain tax sale fees 6

A NNUAL T AX S ALE  2010 Annual Tax Sale Timeline  11/1/11  2nd installment due date  5/30/12  Parcels published in newspapers  6/1/12  Delinquency notice to homeowner sent by certified mail  6/1/12 to 7/24/12  Tax buyer registration  8/3/12 to 8/8/12  Tax sale 7

A NNUAL T AX S ALE  Certain Parcels Excluded From Sale  Delinquent taxes less than $100  Parcels part of a Federal bankruptcy case  Parcels in the process of being purchased/acquired by another local government entity  Parcels issued a certificate of error by the Cook County Assessor’s Office  Parcels forfeited three times in the prior three annual tax sales. Approximately 15,000 PINs per sale were removed in the 2007, 2008, 2009 annual tax sale. 8

A NNUAL T AX S ALE  Tax Sale Bidding Process  Tax buyers bid a % from 18% down to 0% of what the property owner has to pay above the amount of taxes and interest due to the tax buyer  Lowest bid wins ( reverse auction )  Tax buyers required to pay taxes purchased next day to Treasurer’s Office 9

A NNUAL T AX S ALE  Tax Sale Bidding Process (continued)  Treasurer’s Office distributes collected taxes to taxing agencies after the sale  Cook County Clerk issues tax certificate to tax buyer and takes responsibility for process going forward regarding property owner redemption and interaction with tax buyer to acquire tax deed 10

A NNUAL T AX S ALE - O NLINE  Treasurer’s Office implemented an online electronic tax sale at www.cooktaxsale.com in 2008  Now the sale takes place over 4 days  Previously the sale took 4 to 6 weeks  Bidding conducted using online site  Automated process replaced traditional open outcry auction  Registration, collateral deposits and payment of taxes managed online  All processes were previously done manually by staff 11

A NNUAL T AX S ALE Annual Tax Sale Statistics Tax Sale Parcels Parcels Parcels Parcels $ Sold Year Date Published Offered Sold Forfeited Parcels 2007 Aug. 2009 62,728 29,787 23,848 5,939 $103.4M 2008 Sep. 2010 57,181 33,114 21,399 11,715 $102.5M 2009 July 2011 69,484 37,827 20,814 17,013 $90.4M 2010 Aug. 2012 78,418 49,462 16,419 33,043 $78.2M 12

S CAVENGER T AX S ALE  Occurs every 2 years in odd numbered years. Next sale is in 2013  Sale historically takes place in December  Sale of taxes where for a parcel 2 or more tax years for the past 20 years are still delinquent  Typically: distressed properties, vacant lots, abandoned commercial property, small/irregular shaped parcels 13

S CAVENGER T AX S ALE  Purpose of the scavenger tax sale is to sell taxes that typically are no longer generating property tax revenue that will result in a new owner acquiring a tax deed who will pay the taxes going forward resulting in tax revenue to the taxing agencies  Taxes can be sold for less than total taxes and interest due  Minimum bid is $250 on a parcel Example: Total amount of taxes are due for $10,000 for 5 years, taxes are sold for bid amount of $250. 14

S CAVENGER T AX S ALE  Traditional incremental bidding process where highest bid wins  Winning bid can exceed actual taxes due  Sale is open outcry auction that takes typically 4 or 5 days  Cook County can also obtain parcels for municipalities through the no-cash-bid program 15

S CAVENGER T AX S ALE  Property owner has opportunity to redeem taxes.  In some cases tax buyer can typically go to deed in a shorter time frame – 6 months for vacant land  Similar to annual tax sale  Treasurer’s Office collects payments from tax buyers and distributes to taxing agencies  Clerk’s Office has responsibility over procedures for property owners to redeem and tax buyers to 16 obtain a tax deed.

S CAVENGER T AX S ALE  2011 Scavenger Tax Sale Timeline  11/30/11 and 12/3/11  Published PINs in Newspapers  12/2/11 to 12/22/11  Tax Buyer Registration  12/30/11  Scavenger Sale – Sale conducted in 10-day span 17

S CAVENGER T AX S ALES Scavenger Tax Sale Statistics Sale Sale Parcels Parcels Parcels $ Parcels Year Date Published Offered Sold Sold 2007 Dec. 2007 6,060 4,712 1,326 $5.9M 2009 Dec. 2009 10,531 9,215 545 $1.9M 2011 Dec. 2011 24,258 19,285 1,112 $3.2M 18

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