There are many things that Illinois is known for, but one for which residents wish it wasn’t, was its high property taxes. And it has once again topped the list—ranking second behind New Jersey—on the list of highest property tax rates in the nation for 2021.
Illinois’ High Tax Rates
According to the Census Bureau, the average American household spends about $2,471 on residential property taxes each year. However, Illinois homeowners average $4,942 in property taxes on a median-valued home of $217,500—2.27% of the house value—which is double the national average.
New Jersey, which comes in first on this list, averages about $5,419 in residential property taxes, which comes out to about 2.49% of the house value. The median house value of a house in Illinois, however, is far lower than in New Jersey, $1,94,500 vs. $335,600.
This is the fourth year that Illinois has ranked the second-highest on the survey rankings released by WalletHub. The group compares the 50 states and District of Columbia using Census Bureau data to determine real estate property tax rates.
The impact of Illinois’ high tax rate has been that the state saw the largest population loss since World War II in this past year. It’s calculated that moving to nearby states would save property owners the following:
- Wisconsin: $915
- Iowa: $1,535
- Michigan: $1,599
- Missouri: $2,831
- Kentucky: $3,076
- Indiana: $3,089
Although high property taxes are a statewide issue, they are especially tough in Cook County, which just had its first installment deadline March 2. According to an October report from the Cook County Treasurer’s office, the county’s property taxes grew at roughly three times the rate of inflation from 2000 to 2020.
The state’s property tax issues are tied to the pension debt. Local governments across Illinois have pension debt worth $63 billion. As an example, in Chicago, nearly $42.5 million of the overall tax revenue of nearly $94 million will be used to make up for shortfalls in pension funding.
The best way for property owners to ensure they’re not paying too much in property taxes is to double-check that they’re receiving all exemptions for which they are entitled and to appeal their assessments when they receive them, if the information is incorrect or out of line with other similar properties in the area.