New Property Tax Reform Law Decreases Interest on Late Taxes

On Friday, Illinois Gov. J.B. Pritzker signed into law historic reforms to fix long-standing racial inequities and abuses in the state’s property tax system spotlighted in two studies issued last year by Cook County Treasurer Maria Pappas.

Pappas’ property tax equity legislation will help Cook County property owners who fall behind on their taxes by slashing interest rates on late payments in half — from 18% to 9% per year. The reduction will save homeowners and businesses $25 million to $35 million a year, with most savings realized in Black and Latino communities.

The reforms, the state’s most significant changes to its property tax code in decades, also were backed by the Chicago Community Trust, one of the nation’s oldest and largest community foundations.

In addition to cutting the interest rate, the new law:

  • Permits counties to use new tools to put chronically tax delinquent properties into the hands of municipalities, local developers and nonprofit organizations so the properties may be more quickly rehabilitated.
  • Closes loopholes that have allowed tax buyers — mostly hedge funds, private equity firms and lawyers — to drain $40 million each year from governments serving mostly Black and Latino residents.

Pappas’ office began drafting the legislation following the release of two studies by her research team, “How Wealthy Investors are Making Millions Exploiting Illinois’ Property Tax Law” and “Maps of Inequality.”

You can read those studies at www.cookcountytreasurer.com.

The new law is to take effect Jan. 1.