A recent study has concluded that Illinois has the second highest property taxes in the nation, second only to the state of New Jersey.
Complaining about property taxes is a common pastime in this country, but if you’re an Illinois resident, you can be assured that it’s not your imagination. Illinois has the second highest property taxes in the country.
The Illinois statewide average effective tax rate is 2.32%, nearly double the national average according to Smart Asset. The average homeowner in Illinois pays $4,058 annually in property taxes. Many residents in Chicago and the surrounding counties pay more.
Top 10 states with the highest property taxes
New Jersey: $7,601 (2.4%)
Illinois: $4,058 (2.32%)
New Hampshire: $5,241 (2.19%)
Connecticut: $5,443 (2.02%)
Wisconsin: $3,257 (1.95%)
Texas: $2,654 (1.86%)
Nebraska: $2,506 (1.83%)
Vermont: $3,893 (1.78%)
Michigan: $2,185 (1.71%)
Rhode Island: $3,929 (1.65%)
Top 10 states with the lowest property taxes
Hawaii: $1,459 (0.27%)
Alabama: $550 (0.43%)
Louisiana: $750 (0.51%)
Delaware: $1,274 (0.55%)
District of Columbia: $2,811 (0.56%)
Colorado: $1,516 (0.57%)
South Carolina: $821 (0.57%)
West Virginia: $629 (0.59%)
Wyoming: $1,223 (0.61%)
Arkansas: $721 (0.63%)
New tax codes will be felt
For high property tax states such as Illinois, New Jersey, and New Hampshire, it will be getting even worse once the new tax code kicks in next year.
In the past, property taxes were a separate tax deduction you could take in full. Starting in 2018, property taxes will be part of a lump deduction along with state and local sales and income taxes that will be capped at $10,000, even for those married filing jointly.
The effect of high property taxes on Illinois
Property taxes are not just an afterthought when buying a home. They can cause buyers to steer clear of certain areas. Illinois is suffering from four straight years of population loss, and in 2017 it dropped from the fifth largest state to the sixth.
“I have shown buyers properties that they fell in love with, only to say a big fat no because the taxes were too high,” says real estate agent Denise Supplee at SparkRental.com. “So, property taxes do matter! And the new cap of $10,000 on property and other taxes will only make it more difficult for high-property-tax states.”
There are other factors in play when it comes to the overall cost of living other than property taxes.
“Every state has their own mixture of taxes that they rely on to fund government services, primarily schools,” says Norton Francis, a senior research associate at the Urban-Brookings Tax Policy Center, a think tank.
States with lower property taxes may have higher income or sales taxes. Some states with higher property taxes have lower income or sales taxes. Some states rely heavily on surcharges for gasoline and cigarettes. Often times, areas with the highest property taxes also have some of the best schools.
Taxes are only one variable that people consider when it comes to buying a home or deciding where to move. One must also consider factors such as job opportunities, schools, and crime rates.
Even considering other factors though, Illinois’ second-highest property taxes in the country is likely contributing to the state’s population loss.
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2018’s Property Taxes by State – WalletHub
These States Have the Highest Property Taxes, but a Possible Loophole Offers Hope – Realtor
Should You Steer Clear of the States With the Highest Property Taxes? – Realtor
Best and Worst States for Property Taxes – The Balance
Illinois drops from the fifth-largest state to No. 6 – Chicago Tribune