Since the first installment of Chicago 2015 property taxes has come out, many are upset about the increases. And they're not finished increasing yet! Read this if you need to catch up. I'm writing this post for those willing to sell/leave their current home in the city, and buy in the suburbs. Defining whether or not your property taxes are high or low is somewhat relative. Are you comparing your taxes to those in a neighboring town? County? State? Or are we looking nation-wide? Also, since they're pretty much inevitable, what benefits are you receiving from the village in return for the property taxes you're paying?
We're going to talk about:
- What you get/don't get in the city and the burbs
- Illinois’ bad rap
- Chicago's taxes aren't that high (shocker)
- Compare hypothetical property taxes based on suburb
City VS. Burbs
There are both positives and negatives to city life and suburb life. If you're in the city, things like proximity to transportation/work, limitless restaurants, activities, and events, nightlife, and the busy-energetic vibe are some of the things that keep you there. Proximity to the workplace is definitely a large factor when people determine where they live, and you will definitely find this to be the case with city dwellers. If you're living in the city, and reverse commuting to the burbs, then buy in the burbs my friend, I can help you :) … In the meantime, we'll pray for you.
Finding a good public school, however, is pretty rare in the city. Chicago Public Schools (CPS) doesn't have the best reputation as it is, and in recent years there's even been many CPS closings. If you read link above (here again), you'll read that part of what the tax increases will go toward the CPS system-which, seems to be mainly for construction and pensions. This is not reassuring for Chicago homeowners. The point is… you don't get the "schools" in return for paying your property taxes in Chicago. On the other side of the coin, since buyers tend to be less concerned with the school situation when looking in the city, the lack thereof is less likely to negatively affect your property's value. The other thing that you won't get is acreage. Not to anyone's surprise, I'm sure, most properties have very small yards, and needed to at least be mentioned here.
On the contrary, when buying a home in the suburbs, one of the biggest factors I come across is "Schools." Unlike the city, this has a large effect on current and future value. Therefore, even the people/couples without plans to have children still want to be within the best school system possible, all in the name of “resale.” MOST school systems in the north and northwest suburbs have at least good schools if not great, and in many cases the schools are some of the best in the country. (I say "most" because obviously not "all" school systems are quality --see the High School rankings for IL here). You'll also get a decent sized yard in the suburbs, or at least have enough options to choose the yard size you desire.
The point is… you don't get the "schools" in return for paying your property taxes in Chicago.
I realize the city life cannot be duplicated; furthermore, each neighborhood in Chicago has its own feel and famous points of interest--that certainly cannot be duplicated. However, many of the suburbs have done a very good job creating their own downtown areas with great food and nightlife. This makes the transition a little easier for those who are reluctant to make the move to the burbs.
Illinois’ Bad Rap
Illinois, has been getting a pretty bad reputation regarding property taxes being among the highest in the country. I will not fight the stats...but I will defend the state a little. This is based on a story I heard while talking with a neighbor the other day. She mentioned a friend who moved from Libertyville, IL to a suburb in North Carolina. She was telling me how their taxes are so low... like $2500/year for a 400k-500k home. As you'll see below, that is very low relative to what we'd be paying in IL. However, she also mentioned a couple concerns that seem to be directly related to the low tax bill. She said they’re on the verge of closing the local library, the kids don't take a foreign language until high school, families need to pay for sports equipment--even for some of the main sports, and how some schools don't have computers--I mean, computers? In 2016? That's a pretty bad.
To defend good ol’ Land of Lincoln Illinois a little, although the taxes are among the highest in the country, the school systems and villages are among the best in the country. I would argue that you’re getting what you pay for in most of the Lake and Cook County suburbs. Even some of the towns and schools that are locally known as the middle to low schools and villages are probably better than those in other areas just because of the sheer proximity to the great schools and trying to keep up with the competition. Some things you'll see that can be pretty standard around here and are direct results of the financing received through property taxes are as follows: School-related examples could be: new wings/additions (tech, science, field houses, etc.), sports equipment, special sport options (field hockey? Pole Vaulting?), amazing facilities (new turf grass, the track, pools, clubs houses, etc.), low student to teacher ratios, take-home iPads in junior high, state of the art tech... And, of course, the actual curriculum and quality teachers. Some village examples could be: clean streets, updated downtown area (lights/seasonal decorations, sidewalk repairs, fireworks/parades, etc.), events, twice/week garbage pickup, beaches, parks, parking, medians, landscaping, etc... Up keeping these things can make a town more functional and look nice. Illinois residents have to take on the financial burden of the property taxes, but they at least get something in return. If you're not getting these things and the tax bill is high, then you can question your choice of 'burb. But! Below you'll see how affordable they can be, especially when you compare them to what you'd be paying for in the city.
Although the taxes are among the highest in the country, the school systems and villages are among the best in the country.
Chicago's Property Taxes Aren't That High
If you live in the city and you're reading this, I’d be curious to know what the Cook County Assessor’s website has listed for your tax rate for your property. Click here
Compare your tax rate to the rates in Cook County in the chart below. If your rate is lower than those you see, the tax bill will definitely be lower. Cross-county comparisons would require comparing the final property tax number, not the rate. Some of the final tax numbers below are not that much higher than they would be in the city. You’ll need to do your own comparison, but I think the benefits you receive in comparison are far more than you would receive in the city. There are of course other issues, tax wise, to leave the city. This article talks about several, here.
Tax Breakdown by Suburb
Finally, the reason you even clicked on this article :)
Below is a chart to show what your tax bill will be in each suburb for a $500k home and a $1M home. Some disclosures about the chart:
- The rate is only comparable within the same county due to differences in calculation
- My tax numbers include the Homestead Exemption which is a discount received for occupying the home
- The tax bill will be slightly higher if you are buying as an investment or second home
- If you're a senior you can claim a senior exemption that will discount the bill even more
- This chart doesn't include all the suburbs, but many of the most saught after areas in the area
If you want to know more about how to calculate your property taxes, click here.
If you're interested in selling your current home and buying in any of the suburbs, please find me via the Connect tab above, or the social media icons at the bottom of the page, and reach out to me.
Comments and questions please!
Thank you for reading,