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Illinois Now With Highest Median Tax Rate in the Nation

by Steven Kandelman

With the second installment 2016 real estate tax bills soon to be mailed out at the end of June, 2017 (due on August 1, 2017), a new analysis of real estate taxes nationwide has alarming conclusions for Illinois taxpayers and homeowners.  According to a recently released CoreLogic comparative analysis of property taxes across the nation, Illinois has the highest median property tax rate in the nation with various taxing bodies and municipal agencies taxing a combined 2.67 percent of a typical home’s property value annually.  For example, in Illinois, a house valued at $200,000 would pay $5,340 in real estate taxes.  The median value means half of the tax rates are higher and half of the tax rates are lower.  Behind Illinois’ median tax rate are New York at 2.53%, New Hampshire at 2.4% and New Jersey at 2.37%.  Hawaii has the lowest median property tax rate at 0.31%, while Illinois’ neighboring states  like Wisconsin has a 1.95% rate, Iowa has a 1.69% rate, Missouri has a 1.26% rate and Indiana has a 0.88% rate.[1]

There are a number of reasons behind the extremely high Illinois tax rates and they include the fact that there are nearly 7,000 taxing bodies in Illinois, the most in the nation.  Operating every one of these entities are government employees.  With the increasing costs of the government-worker pensions, increasing costs of government-worker health care, wage requirements and workers’ compensation costs, many of these taxing bodies have increasing budgetary needs as a result.[2]  Other studies reached similar conclusions.  A study conducted by WalletHub, a personal finance website, found that Illinois ranks 50th in the nation behind 51st ranked New Jersey (50 states plus the District of Columbia were included) with an effective real estate tax rate of 2.3%.  In addition, a study prepared the nonprofit Tax Foundation also found Illinois to have the second highest property taxes in the nation.  As a result of these high tax rates, Illinoisans paid more than $15.5 billion in property taxes last year.  Daren Blomquist of ATTOM Data Solutions (formerly Realty Trac) states that these extremely high real estate taxes cause a downward cycle of lower home values which in turn cause even higher tax rates to compensate for lower home values.[3]

Unfortunately, this means that our Illinois economy is reliant on one of the highest real estate tax bases in the nation.  There is no end in sight as Illinois’ pensions obligations continue to grow every day and the Illinois legislature and the Illinois Governor have failed to pass a budget since the summer of 2015.

[1] “Illinois Property Taxes Highest in Nation, Study Finds,” by Becky Yerak, Chicago Tribune, April 27, 2017.

[2]  “Illinois Property Taxes Highest in the U.S., Double National Average,” from the website, www.illinoispolicy.org, April 28, 2016.

[3] “Illinoisans pay mor than 2 percent of home’s value in property taxes,” by the Illinois News Network, www.ilnews.org, April 16, 2017.


For more information on this article, contact the Law Offices of Rieff, Schramm, Kanter & Guttman.