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Two Illinois counties in top 10 of highest U.S. property tax rates

Illinois Watchdog.Org

Tuesday, April 10, 2018  |  Article  |  By Cole Lauterbach

Taxes, property (87)
Homeowners in two Illinois counties will pay a higher percentage of their home value in property taxes this year than nearly any other county in America. Neither are in the Chicago area.

Housing data firm Attom Data Solutions released its report on 2017’s highest property tax rates by county. Residents of Bureau County in north-central Illinois will pay 3.6 percent of their home value. Residents of Winnebago County, along the north-central Illinois border with Wisconsin, will pay 3.2 percent. That ranks them fourth and eighth highest in the nation, respectively.

Both counties saw home values drop last year, meaning the tax assessments were larger percentages of less property value, Attom Vice President Daren Blomquist said.

“Tax rates actually go up if they’re based on outdated home values,” he said.

Attom also found that its list of the highest tax areas often overlap with areas where the U.S. Census Bureau saw the most people move out last year.

“In many of the counties in Illinois, including Winnebago and Bureau, we’re seeing declines in population,” Blomquist said.

The state as a whole will average a 2.2 percent tax rate over market value. Property owners in Illinois will pay just under $5,000 annually, on average. That's less than taxpayers in nation-leading New Jersey ($8,696) and a number of other states with much lower effective rates. The key is what homeowners locally pay as a percentage of the market value of their homes.

Property taxpayers in California paid an average of $5,087 in 2017. That’s because California homes are more valuable, but taxed at a lower percentage.

Property taxes, Blomquist said, act as a price suppressant because potential buyers will not purchase a home with a monthly mortgage and property tax that is out of their pay scale.

“You could afford that $200,000 home because of the lower property taxes, but you couldn’t in Illinois,” he said.

The reasons for Illinois’ high property tax rates come from a number of different places. One is the nearly 7,000 units of local government that often vie for the same shrinking property tax pool. Illinois' schools also rely on property taxes to pay for the lion’s share of education costs.

Because Illinois is the only state in the nation that pays property taxes in arrears, 2.22 is the average rate Illinois homeowners will pay in 2018.