Gov. JB Pritzker signed landmark legislation pushed by Cook County Treasurer Maria Pappas into law to protect homeowners from losing their equity through property tax foreclosure. The new law marks the most significant overhaul of Illinois’ property tax foreclosure system in decades. It also brings the state into compliance with the U.S. Supreme Court’s 2023 Tyler v. Hennepin decision, which held that governments can only keep the amount of foreclosure proceeds needed to pay the amount owed in delinquent taxes, penalties and fees. For generations, Illinois property owners who fell behind on their taxes risked losing not only their homes but also any equity they’d accumulated over years of mortgage payments. Under the previous system, tax lien investors could ultimately acquire properties and keep all the owner’s equity after paying off the tax debt, even when that debt represented only a small fraction of the property’s value. The new law ends that practice by ensuring that any equity remaining after taxes, interest and fees is returned to the former property owner.