Property Tax Anxiety: Illinois Residents Brace for Increase

The state with the second-highest property tax rates in the U.S. is looking to raise them even higher, spiking concern amongst homeowners.

Illinois Property Tax

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Illinois is passing legislation that could lead to an increase in property tax for some, much to the chagrin of homeowners statewide.

The House Makes Moves

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On Thursday, the House Revenue and Finance Committee of Illinois gathered in Springfield to vote on House Bill 1075. This bill would establish a museum levy in certain parts of the state.

A Museum Levy

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The museum levy would allow certain townships and villages to increase their property tax rate to help support local museums and other cultural activities.

Second Highest in the Country

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While it is not applicable statewide, initiatives like this raise reasonable concerns for Illinois homeowners, who already pay the second-highest property tax rates in the country, according to personal finance site MoneyGeek.

Acknowledging Homeowner Concerns

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Brad Cole, Executive Director of the Illinois Municipal League, acknowledged these concerns while he explained the bill to the committee.

“For a Community Function”

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“Nobody here wants to support property tax increases but what we’ve already heard is it’s a de minimis amount, it’s for a community function, museum affairs, and activities,”  he said.

Going in the Wrong Direction

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Republican State Representative Joe Sosnowski told reporters that the committee and state lawmakers overall are going in the wrong direction concerning property tax.

Should Illinois Be Concerned?

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“Basically we’re just expanding local authority to increase peoples’ local property taxes,” he said.

“In a state where we’re the second highest already, it’s something we need to be concerned about.”

Second Only to New Jersey

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Illinois property owners pay 1.88% in property tax rates, second only to New Jersey. Property taxes in the state make up 2% of the average household income, according to the Illinois Policy Institute (IPI).

MoneyGeek Tax Rankings

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MoneyGeek even gave the tax rankings in Illinois an ‘F’ grade due to their steepness and the consequences they have on the average single-property homeowner.

Illinois At “Rock Bottom”

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Josh Bandoch, a spokesperson for the IPI, believes that an F grade is “too high” for Illinois.

“Except for New Jersey, Illinois ranks at the rock bottom when it comes to tax friendliness,” he said.

Heavy Tax Burden

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He described the current rate as a huge tax burden for the average homeowner in Illinois and claimed that the rising price of housing across the board has driven people out of the state, which will have a wider effect on the state’s economy.

Rates Rising Across the Country

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It’s a real pain point for homeowners in Illinois and across the country, as property taxes in the USA jumped significantly in 2023.

ATTOM Analysis

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According to ATTOM, a data provider for real estate and housing, the average U.S. homeowner saw their property tax rate increase by an average of 4.01% in 2023 alone.

Inflation, Wages, Other Expenses

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ATTOM’s executive director pointed to “inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses,” as the driving factors behind the increase.

Looking to Other States

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Bandoch compared the tax rate for Illinois, which sits at almost 2%, to the rate in states like Florida, which has a property tax rate of just 0.91%.

According to the IPI, 97% of residents who leave Illinois relocate to states with lower tax rates.

Lowest Rates in the Country

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Other states, like Hawaii, Arizona, Alabama, Delaware, Tennessee, and Idaho, have property tax rates that are even lower.

These six states have the lowest rates in the country, all below 0.05%.

Every Six Minutes

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“Every six minutes and 15 seconds, an Illinois mom, dad, colleague or friend moves out of Illinois to a more tax-friendly state,” Bandoch claimed.

30% Are “Housing-Burdened”

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“Nearly one-third of Illinois households are considered ‘housing burdened’ because they pay at least 30% of their income on housing,” he continued.

“There is a clear connection there as to why families and businesses are leaving Illinois. It is unsustainable.”

Finding Solutions

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State Rep. Sosnowski echoed these concerns, telling reporters that the state would need to find a way to cap these increases in order to “keep people here and to bring people to Illinois.”

The post Illinois Considers Raising Property Taxes, Homeowners Anxious first appeared on Wealthy Living.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.