Property Tax Rate in Illinois

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General Moving

Most people dread the month of April because of a single word: taxes.  While nobody likes paying taxes, some states seem to have a rougher time than others.  Residents of Illinois will often complain about their tax burden, and many site the high taxes as a reason to migrate to a different state.  But are people truly relocating to save on taxes?

There are many types of taxes.  One important one, and one that many Prairie State residents gripe about, is the property tax.  This tax, also know as the millage tax, is assessed on a person’s home or other property.  According to data from the non-profit, non-partisan organization the Tax Foundation, Illinoisans do have something to complain about in this department.  The Land of Lincoln has one of the highest property tax rates across all fifty states and the District of Columbia.  The graph below shows the mean percentage rate of property taxes for each state for owner-occupied housing.  Illinois has the second highest rate, 2.32%, just behind New Jersey’s 2.38% property tax.  At the opposite end of the spectrum, Hawaii has the smallest property tax rate with a mean of only 0.28%.  These values show the mean across states, which can see large differences in property taxes both across and within counties.

property-tax-state-ranks

With Illinois taking the number two spot on the highest property tax list, residents choosing to relocate to a different state will be getting a property tax break regardless of where they go, with the exception of New Jersey.  Census data tracking migration between 2015-2016 showed Illinois lost the most residents to Missouri, Texas, Florida, California, Wisconsin, and Indiana.  Texas welcomed 21,927 former Illinois residents, Wisconsin 23,233, Missouri 23,915, California 26,189, Florida 26,406, and Indiana a whopping 34,221.   While all of these states do have lower property taxes than Illinois, some still rank high in comparing national averages.  Wisconsin and Texas, while lower than Illinois were still in the top ten at #5 and #6.  However it might be incentives other than a property tax break enticing residents to these states.  For instance, Texas does not collect an individual income tax.  So while they may not be getting as large of a property tax break, their overall tax burden might be reduced from not having income taxed.  It is hard to say how much of a role property taxes play in where people decide to move. Interestingly enough, like the property tax standings, New Jersey and Illinois also took the #1 and #2 spots in outbound migration this past year according to data from United Van Lines.  In looking at the Tax Foundation data and listening to testimonies of people deciding to leave Illinois, it cannot be ignored that the high property tax rate in Illinois is not doing the state any favors in trying to curb its out migration.

 

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