This ARTICLE On Illinois High Property Tax Lowering Residential Home Values Was PUBLISHED On November 23rd, 2019
The housing market is booming nationwide. Opps!!! Not in all states.
- High taxed states have real estate values dropping
- For example, Illinois High Property Tax is lowering home values throughout the state
- Illinois has the second-highest property tax rate in the Nation
- Illinois is the highest taxed state in the United States
- With high taxes, Illinois politicians have no intention in capping taxes
- Governor J.B. Pritzker is not just increasing existing taxes but is creating new taxes
- Pritzker recently doubled the state’s gas tax
- Pritzker is lobbying to change the state flat tax system to a progressive tax planto meet the state’s budget deficit and growing pension debt
- The governor is not just increasing and raising taxes but is not cutting spending
- He recently gave Illinois lawmakers a wage increase when the state is on the brink of bankruptcy
In this article, we will cover and discuss how Illinois High Property Tax Lowering Residential Home Values.
Illinois High Property Tax Ranks As The Second Highest In The United States
Illinois has the second-highest property tax rate in the Nation.
- Only New Jersey surpasses Illinois and is the state with the highest property tax in the country
- Illinois average annual effective property tax on single-family homes is 2.13%
- However, property tax rates differ from county to county
- Illinois has a major crisis in its budget deficit and pension debt
- Politicians are resorting to increasing property taxes to cover these budget shortfalls
- Property tax is what payes for operations of the government
- Police and fire services are paid from property tax revenues
- The city’s water and sewer department is paid for with property taxes
Other government services paid for with property tax revenues includes schools and public education, infrastructure, park services, social services, and other support services, divisions.
Every Homeowner Pays Property Taxes For Government Services
Are property taxes worth it? Do homeowners get a lot of bang for the buck? How do property taxes affect a homeowners’s overall return on homeownership? Homeowners need to realize that the property taxes affects housing values. Taxes drain money that impacts a homeowners’ ability in building equity. Property taxes is one of the main reasons why homeowners cannot pay their outstanding mortgage loan balance earlier. For most homeowners, property taxes are the second highest cost of homeownership. The mortgage is the first highest expense in homeownership.
According to Piotr Bieda of Gustan Cho Associates, a real estate investor and tax expert, he said the following:
We see that home price appreciation is held in check by property taxes. 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. On the other hand, low-property-tax states, such as Nevada and Arizona, tend to be more susceptible to extreme swings in property values. In a way, high property taxes insulate Illinoisans from the worst of market cycles, though that’s cold comfort to many. One way to analyze the value you get from property taxes is to “unbundle” the amenities and services from the quality of life in that neighborhood. With an a la carte approach to municipal amenities and corresponding taxes, you can identify where you get the most for what you are paying. For instance, if you’re looking to buy a home and you want access to a top-quality library, but don’t have any children in public schools, you might consider buying in an area that channels a healthy revenue stream to its library, even if its public schools are not highly rated. You can fine-tune your decision based on which benefits are most important to you.
If you do not think you are getting what you are paying for, know how the system works before you lodge a complaint.
Where Do Funds From Property Taxes Go?
Towns and cities use the proceeds of property taxes to pay for its government operations such as police, fire, roads, schools, parks, and other city services.
- The homeowners property tax bill will analyze how much the municipality will spend by the taxing departments such as the water, library, and other governmental agencies
- The clerk is the official that calculated the property tax rate
- Unlike income taxes where if income goes down, income taxes follow down
- With property taxes, if the value of the property tax goes down, the tax can go up
- For example, DuPage County Illinois home values went down 24% since the 2008 Great Recession while property taxes went up by 7 percent
- Many communities in Illinois cannot pay its bills even with increasing property taxes
- This is causing an uproar among homeowners
It is not just individual taxpayers who are fleeing Illinois communities but also businesses.
Illinois High Property Tax Causing Taxpayers To Flee The State
For many years, there were rumors that many Illinoisans were fleeing the state to other states with low property tax. This is now a reality and not a rumor. Data shows that Illinois is losing a lot of taxpayers due to high property taxes. Home values nationwide has been increasing where Illinois home values have been tanking. The state is losing tens of thousands of residents to lower taxed states such as Indiana, Tennessee, Kentucky, Florida, Georgia, Texas, Alabama, and North Carolina. Governor J.B. Pritzker and Illinois politicians need to realize what good is raising taxes and creating new taxes when Illinoisans are fleeing to other states.