Last year, Americans living in single-family homes paid a total of $293.4 billion in property taxes, up 6 percent from 2016’s $277.7 billion total, according to Attom Data Solutions. Illinois is only second to New Jersey when it comes to the highest effective property tax rates. Illinois sits at 2.22 percent, while New Jersey is at 2.28 percent, according to the report. 

How Property Taxes Are Calculated 

Aerial of residential neighborhood in Glenview, IL

Property taxes cover all manner of services and amenities in your town. While those things like public schools, libraries, parks, and garage pickup are essential, the price adds up quickly. Typically, property taxes are the second most expensive part of home ownership, just after your mortgage, according to the Chicago Tribune. 

Many people assume their property tax rates are calculated based solely on the assessment of their property’s value, but this is not actually the case. Instead, the taxing districts, such as the county, first project how much they plan to spend for the year, according to the Chicago Tribune report. After that, taxing districts assess property values. Armed with this information, the county clerk then determines the tax rate.

“The property tax runs counter to income tax. The more income you make, the more taxes you pay. But that’s not the case that when your property values go down, your taxes go down,” chief assessment officer for McHenry County Robert Ross told the Chicago Tribune.

Additionally, property taxes affect home value. Higher property taxes mean there is less likely to be major swings in home value. 

“In higher-tax states, you don’t see home prices rising as quickly during an up cycle in the housing market because people have to pay (through taxes) for those higher values, so those markets are a little more protected from wild swings,” Attom Data Solutions spokesperson Daren Blomquist said in the report.

Losing Homebuyers to Other States

Historic District home in Savannah, Georgia photo by Shutterstock 

Chicago millennials might have scoffed at the Wisconsin ads trying to lure them across the border, but Illinois’s northern neighbor did have good reason to pour money into that campaign. Last year, Illinois lost approximately 33,700 residents, meaning it was no longer the fifth largest state in the country, according to the Chicago Tribune. States like Wisconsin, Texas, and Georgia are welcoming former Illinoisans with open arms, according to Market Watch. 

The Chicago Tribune rounded up first-person accounts of people leaving Illinois. One couple left because the value of the home just couldn’t keep up with ballooning property taxes – they left for Texas in 2016. Another family cited the cost of higher education for their son. They left Naperville for Georgia.

While home sales in Chicago are still quite competitive, certain factors could still contribute to the Illinois exodus trend, according to Market Watch. For example, the GOP tax plan could drive down home values in the state due to changes in how mortgage interest and property taxes could be deducted. More people could start to see the appeal of moving to states with lower property taxes.