Illinois Ends Home Equity Seizures After Supreme Court Ruling

Illinois Governor J.B. Pritzker signed legislation ensuring homeowners receive surplus funds when the government seizes property to cover tax debts.

The bill follows a May ruling finding Cook County liable for constitutional violations related to similar seizures and arrives nearly three years after the U.S. Supreme Court unanimously deemed the practice unconstitutional in Tyler v.

Hennepin County. The Supreme Court case involved Geraldine Tyler, who lost her Minneapolis condo to tax debt despite owing far less than its value.

The court determined governments cannot retain profits exceeding the debt owed, citing the Fifth Amendment’s Takings Clause. Previously, Illinois allowed local governments to sell tax liens to investors who could then claim property ownership after a redemption period, leaving former owners with no equity.

The Pacific Legal Foundation estimates that Illinois homeowners lost an average of 85% of their home equity, totaling over $303 million, due to these laws. This new law aims to compensate those previously affected and prevent future unjust seizures.