PROP TX-OMITTED PROPERTY

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HB4637 - 104th General Assembly

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4637

Introduced 2/3/2026, by Rep. Jay Hoffman

SYNOPSIS AS INTRODUCED:

35 ILCS 200/9-265

Amends the Property Tax Code. In counties with fewer than 3,000,000
inhabitants, provides that property that receives an erroneous homestead
exemption for the current assessment year or for any of the 3 prior
assessment years may be considered omitted property. Provides for
penalties and interest to be imposed on that omitted property. Provides
that any arrearage of taxes or interest that might have been assessed
against that omitted property shall not be chargeable to certain bona fide
purchasers of the property. Effective immediately.
LRB104 19910 HLH 33360 b

A BILL FOR

HB4637
LRB104 19910 HLH 33360 b
1

AN ACT concerning revenue.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Property Tax Code is amended by changing
5
Section 9-265 as follows:

6

(35 ILCS 200/9-265)
7

Sec. 9-265.
Omitted property; interest; change in exempt
8
use or ownership.

9

(a) If any property is omitted in the assessment of any
10
year or years, not to exceed the current assessment year and 3
11
prior years, so that the taxes, for which the property was
12
liable, have not been paid, or if by reason of defective
13
description or assessment, taxes on any property for any year
14
or years have not been paid, or if any taxes are refunded under
15
subsection (b) of Section 14-5 because the taxes were assessed
16
in the wrong person's name, the property, when discovered,
17
shall be listed and assessed by the board of review or, in
18
counties with 3,000,000 or more inhabitants, by the county
19
assessor either on his or her own initiative or when so
20
directed by the board of appeals or board of review.
21

(b) The board of review in counties with less than
22
3,000,000 inhabitants or the county assessor in counties with
23
3,000,000 or more inhabitants may develop reasonable

HB4637
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LRB104 19910 HLH 33360 b
1
procedures for contesting the listing of omitted property
2
under this Division.
3

(c) For purposes of this Section, "defective description
4
or assessment" includes a description or assessment which
5
omits all the improvements thereon as a result of which part of
6
the taxes on the total value of the property as improved remain
7
unpaid. In the case of property subject to assessment by the
8
Department, the property shall be listed and assessed by the
9
Department. All such property shall be placed on the
10
assessment and tax books.
11

(d) The arrearages of taxes which might have been
12
assessed, with 10% interest thereon for each year or portion
13
thereof from 2 years after the time the first correct tax bill
14
ought to have been received, shall be charged against the
15
property by the county clerk.
16

(e) When property or acreage omitted by either incorrect
17
survey or other ministerial assessor error is discovered and
18
the owner has paid its tax bills as received for the year or
19
years of omission of the parcel, then the interest authorized
20
by this Section shall not be chargeable to the owner. However,
21
nothing in this Section shall prevent the collection of the
22
principal amount of back taxes due and owing.
23

(f) If any property listed as exempt by the chief county
24
assessment officer has a change in use, a change in leasehold
25
estate, or a change in titleholder of record by purchase,
26
grant, taking or transfer, it shall be the obligation of the

HB4637
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LRB104 19910 HLH 33360 b
1
transferee to notify the chief county assessment officer in
2
writing within 90 days of the change. If mailed, the notice
3
shall be sent by certified mail, return receipt requested, and
4
shall include the name and address of the taxpayer, the legal
5
description of the property, and the property index number of
6
the property when an index number exists. If notice is
7
provided in person, it shall be provided on a form prescribed
8
by the chief county assessment officer, and the chief county
9
assessment officer shall provide a date stamped copy of the
10
notice. Except as provided in item (6) of subsection (a) of
11
Section 9-260, item (6) of Section 16-135, and item (6) of
12
Section 16-140 of this Code, if the failure to give the
13
notification results in the assessing official continuing to
14
list the property as exempt in subsequent years, the property
15
shall be considered omitted property for purposes of this
16
Code.
17

(g) In counties with fewer than 3,000,000 inhabitants, if
18
a chief county assessment officer discovers at any time before
19
judgment that a property has been granted a homestead
20
exemption under Article 15 of this Code to which it was not
21
entitled
for the current assessment year or for any of the 3
22
prior assessment years
, the chief county assessment officer
23
may consider the erroneously exempt portion of the property as
24
omitted property under this Section for
the assessment year in
25
which the erroneous homestead exemption was applied to the
26
property, but not including any assessment year that occurred

HB4637
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LRB104 19910 HLH 33360 b
1
more than 3 years prior to the current assessment year. The
2
county or its designated agent may use any remedy allowed by
3
law to collect the taxes due on property that is omitted
4
property under this subsection, plus interest in the amount of
5
10% per annum on those amounts, as well as any additional fees
6
or costs incurred in identifying and collecting the unpaid
7
taxes

that taxable year only
.
8

Any arrearage of taxes that might have been assessed
9
against the omitted property but for the erroneous homestead
10
exemption, as well as any interest, fees, or costs imposed on
11
that property under this Section, shall not be chargeable to
12
any bona fide purchaser for value who acquires the property
13
without notice of the erroneous homestead exemption and whose
14
rights in and to the underlying parcel arose after the
15
erroneous homestead exemption was granted but before the
16
erroneously exempt portion of the property was listed as
17
omitted pursuant to this subsection. Nor shall those amounts
18
be chargeable to any mortgagee, tax buyer, judgment creditor,
19
or other lienor whose rights in and to the underlying parcel
20
arose after the erroneous homestead exemption was granted but
21
before the erroneously exempt portion of the property was
22
listed as omitted.
23

A title insurance policy for the property that is issued
24
by a title company licensed to do business in the State and
25
that shows that the property is free and clear of any liens or
26
arrearages imposed under this Section shall be prima facie

HB4637
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LRB104 19910 HLH 33360 b
1
evidence that the person acquiring an interest in the property
2
is without notice of the erroneous homestead exemption.

3
(Source: P.A. 98-615, eff. 6-1-14
.)

4

Section 99.
Effective date.
This Act takes effect upon
5
becoming law.

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