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

OVERVIEW:

ANNUAL AND SCAVENGER PROPERTY TAX SALES

Office of Cook County Treasurer Maria Pappas

October 3, 2012

SUMMARY

Property Tax Cycle Overview Annual Tax Sale Scavenger Tax Sale

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PROPERTY TAX CYCLE OVERVIEW

 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

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PROPERTY TAX CYCLE OVERVIEW

 Tax Billing Example – Tax Year 2010  Billed and Collected in 2011

 1st Installment Due 4/1/11  2nd 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

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ANNUAL TAX SALE

 Sale of delinquent taxes of most recent tax year that takes

place typically is 7 to 9 months after 2nd 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

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ANNUAL TAX SALE

 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

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ANNUAL TAX SALE

 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

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ANNUAL TAX SALE

 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.

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ANNUAL TAX SALE

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

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ANNUAL TAX SALE

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

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ANNUAL TAX SALE - ONLINE

 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

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ANNUAL TAX SALE

Annual Tax Sale Statistics

Tax Year Sale Date Parcels Published Parcels Offered Parcels Sold Parcels Forfeited $ Sold 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

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SCAVENGER TAX SALE

 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

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SCAVENGER TAX SALE

 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

• f $250.

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SCAVENGER TAX SALE

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

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SCAVENGER TAX SALE

 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

• btain a tax deed.

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SCAVENGER TAX SALE

 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

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SCAVENGER TAX SALES

Scavenger Tax Sale Statistics

Sale Year Sale Date Parcels Published Parcels Offered Parcels Sold $ Parcels 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

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DISCUSSION

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