State Laws You Should Know

Vacant Lot Act

Bill Ward, Exec. Vice President

In 1983, the Illinois General Assembly passed legislation intended to protect real estate developers from rising assessments which result from initial platting and subdividing farmland for real estate development. The Developer’s Exemption has been in the Illinois Revenue Act for 32 years and is referred to in HBAI circles as the “Vacant Lot Act.”

The law prevents assessors from increasing the valuation of the property during development and sale of the lots. The property must be: 1. Platted and subdivided in accordance to the Plat Act; 2. The Plat must occur after January 1, 1978; 3. At the time of platting, the property is in excess of five acres (originally 10); 4. At the time of platting the property is vacant or used as a farm as defined by statute. Cook County is exempt from the provisions of this benefit.

The legislature’s exclusive focus in enacting this section was to encourage developers to develop land that had previously been used as farmland or had been vacant. Stated another way, the particular evil that this law was intended to remedy was the imposition of a higher tax upon real estate developers before they had the opportunity to reap the benefits of their investments.

When passed in the Illinois House, then State Rep. Dennis Hastert declared the broader goal of the bill: “This, indeed, does deal with the economic recovery where builders are starting to plat land or bring land into…and start to build houses and get the economy going.”

The Vacant Lot Act can be found in the Illinois Revenue Statute, Chapter 35, ILCS 200/10-25.