Illinois property taxes are now so high that they are equivalent to a second mortgage, according to a new study from the nonpartisan Tax Foundation, a Washington-based tax-research and -education center.
The report, which shows the effective property-tax rates in each state, ranks Illinois as the second-highest property-tax state in the U.S. The top spot goes to New Jersey, where the effective property-tax rates is 2.38 percent, barely higher than Illinois’ 2.32 percent.
The Tax Foundation’s report is in line with an earlier study by WalletHub that showed the dollar amount for property taxes in each state. WalletHub’s study also ranked New Jersey’s $3,971 as the highest average tax burden, while Illinois’ was just a shade lower at $3,939.
An effective property-tax rate of 2.32 percent means that if a typical Illinois homebuyer purchases a home at age 30 and lives there until the age of 79 (the average American life expectancy), that homeowner will pay more to the government for the privilege of owning a home in Illinois than the home is actually worth. If that homeowner lives in that home a few years beyond age 79, the property taxes paid will have surpassed the home’s value. For example, an Illinoisan who buys a $200,000 house will pay $4,640 in property taxes each year, or $46,400 per decade. Owning an Illinois home for a little more than four decades means that person pays property taxes equal to the entire value of the home to the local government.
At a property-tax rate of 2.32 percent, it takes 43 years for an Illinois family to pay property taxes equal to the value of their home, compared with 51 years in neighboring Wisconsin, 67 years in Iowa, 98 years in Missouri, 116 years in Indiana and 118 years in Kentucky.