high property taxes : any way to avoid??? (Chicago, Rockford: sales, real estate)

[joe_obody999]

I would love to move to the burbs of chicago, e.g. i have family out in the St. Charles/Geneva area, but wow the property taxes on a $300,000 home often come at at $9000/year or so. Compare that to same house in Portland OR and property taxes are $3000, or across the river in Vancouver WA about the same ($3000) but no state income tax, or in Scottsdale AZ and more like $1500 property taxes.

Are there any nice suburbs of Chicago that do not hit homeowners with such high property taxes? I even checked Rockford IL, just as bad or worse.

[chet everett]

As a percentage of value your smallest tax rate comes in the towns with the highest values -- many homes in the desirable parts of Oak Brook have taxes around 1% or so of market value. Of course if the cheapest house is $600K that is still $6,000 every year...

Another strategy to minimize property tax is to "buy cheap" -- in a town where there are lots of 5 bedroom homes a house with 3 br might save a signficant chunk on taxes.

A third strategy is to go for a townhouse or condo -- though the long term price appreciation of these often is terrible compared to single family detached homes you can have access to the same town for a fraction of the cost and thus lower annual taxes...

[joe_obody999]

Than you Chet, I am going to do some research on your ideas, look at Oak brook, etc!

Originally Posted by chet everett

As a percentage of value your smallest tax rate comes in the towns with the highest values -- many homes in the desirable parts of Oak Brook have taxes around 1% or so of market value. Of course if the cheapest house is $600K that is still $6,000 every year...

Another strategy to minimize property tax is to "buy cheap" -- in a town where there are lots of 5 bedroom homes a house with 3 br might save a signficant chunk on taxes.

A third strategy is to go for a townhouse or condo -- though the long term price appreciation of these often is terrible compared to single family detached homes you can have access to the same town for a fraction of the cost and thus lower annual taxes...

[ToriaT]

Good luck on Oak Brook. Most of the places there are very expensive. While property taxes vary, there is no way to really get around them. Dupage county seems to have higher taxes than Cook County does.

[holl1ngsworth]

Originally Posted by joe_obody999

I would love to move to the burbs of chicago, e.g. i have family out in the St. Charles/Geneva area, but wow the property taxes on a $300,000 home often come at at $9000/year or so. Compare that to same house in Portland OR and property taxes are $3000, or across the river in Vancouver WA about the same ($3000) but no state income tax, or in Scottsdale AZ and more like $1500 property taxes.

Are there any nice suburbs of Chicago that do not hit homeowners with such high property taxes? I even checked Rockford IL, just as bad or worse.

This seems a little extreme. Local taxing bodies have been slow to reassess values, so you might have happened upon a home that got assessed in '06-'08 and not since. Like Chet says, the most expensive towns can usually afford to charge the lowest rates, and large homes in more modest towns usually have to shoulder outsized tax burdens. But in St. Charles, a $300k home is very middle of the road. 3% on a $300,000 is a lot. Pay attention to to last sale price and date. If this home for whatever reason sold for $450-$500k back in 2006, and is a distressed sale now, you could talk to the township and (*likely*) get that tax amount down -- after the sale at $300k of course. Not sure if there is a way to know ahead of time though.

I bought into Wheaton last year and pay roughly 1.75%. I talked to the township after my purchase and had my taxes lowered, albeit by a minuscule amount.

[wjj]

I don't know if you will ever be able to find reasonable real estate taxes - or taxes in general - in the Chicagoland area without fundamental changes in state government. But that is simply not going to happen, so you need to either get out (or don't come in the first place) or take a deep breath and bear it.

We have a second home in SW Florida and will be making it our principal residence in a year or two. The main reason is that in retirement, Buffalo Grove (Lake County side) real estate taxes are just not sustainable. $13K for a 30+ year old frame tract home. Plus of course, the 5% income tax and 7.5% - 8% sales tax in Lake County (depending on where you are) - and even higher if you shop or eat in Cook County. In South Fort Myers for a slightly smaller home, but only 14 years old with an in ground pool and spa with a 170 foot lake frontage, currently real estate taxes of $4,000 which will drop to $3,200 once we are able to homestead the property. Plus no state income or estate taxes (Illinois still has an estate tax that kicks in well below the federal threshold) and a 6% sales tax. Really a no brainer if one is able to move. And there are many, many other places in the country that are similarly attractive.

But it gets even worse. Our plan was to sell our BG house and buy a smaller townhouse or condo in the area since we will still spend several months a year up here. We foolishly thought we would be able to cut at least our real estate taxes significantly in doing so. NOT! Looking at nicer townhouse communities in BG, real estate taxes were still pushing $10K for the unit itself plus the portion of the HOA fee that goes toward paying RE taxes for the common elements means the out of pocket amount going to RE taxes is very high. We even looked at Prairie Park (very nice condo development) in Wheeling of all places figuring, hey, it's Wheeling so how high can taxes be? Well, the answer is, about the same as in BG.

Illinois has become a typical very high tax nanny state over the last 20 years or so. It will only get worse. Our BG house has significantly declined in value but our RE taxes increased every single year as the dozens of units of government simply increased their rates to make up for the decrease in assessed valuations. Now, watch what happens. Various taxing districts are touting how they are holding the line on rates. But those rates were inflated to offset the decline in property values. So as prices continue to recover, those inflated rates will be applied and RE taxes will sky rocket as home prices get back near pre recession levels. And yet these politicians will be re-elected since they "are holding the line on taxes", while in reality, they are creating large tax increases. Unfortunately, basic math is not something that the general population is particularly skilled in, so the tax increases continue.

Of course, there is more to it than just taxes and people have different priorities in different stages of their life. I would never subject my kids to Lee County FL schools, so while they were in school, paying high taxes to Districts 96 and 125 was acceptable and I viewed it almost like an investment in their future. But they are now over 10 years out of Stevenson and I am in the process of ratcheting down my career, so I now have different priorities which do not include paying sky high RE taxes without seeing much in return.

[maybetoday]

in Chicago area the lower the taxes the worse the schools, or so it seems. I am sure there are exceptions to this. Property taxes are ridiculous here though, for sure.

[MPowering1]

Joe, weren't you the poster asking about snow a few months ago and saying you work from home? Or are retired and just dabbling?

Based on my thoughts that you may not have a daily commute, one option a lot of people in Illinois are choosing is to move to Indiana. It will tack on time commuting to St. Charles, but you'll get a great house with reasonable property taxes. I would check out Crown Point and perhaps post in the Northwest Indiana forum for good answers to questions about the area.

[cubssoxfan]

Originally Posted by wjj

I don't know if you will ever be able to find reasonable real estate taxes - or taxes in general - in the Chicagoland area without fundamental changes in state government. But that is simply not going to happen, so you need to either get out (or don't come in the first place) or take a deep breath and bear it.

We have a second home in SW Florida and will be making it our principal residence in a year or two. The main reason is that in retirement, Buffalo Grove (Lake County side) real estate taxes are just not sustainable. $13K for a 30+ year old frame tract home. Plus of course, the 5% income tax and 7.5% - 8% sales tax in Lake County (depending on where you are) - and even higher if you shop or eat in Cook County. In South Fort Myers for a slightly smaller home, but only 14 years old with an in ground pool and spa with a 170 foot lake frontage, currently real estate taxes of $4,000 which will drop to $3,200 once we are able to homestead the property. Plus no state income or estate taxes (Illinois still has an estate tax that kicks in well below the federal threshold) and a 6% sales tax. Really a no brainer if one is able to move. And there are many, many other places in the country that are similarly attractive.

But it gets even worse. Our plan was to sell our BG house and buy a smaller townhouse or condo in the area since we will still spend several months a year up here. We foolishly thought we would be able to cut at least our real estate taxes significantly in doing so. NOT! Looking at nicer townhouse communities in BG, real estate taxes were still pushing $10K for the unit itself plus the portion of the HOA fee that goes toward paying RE taxes for the common elements means the out of pocket amount going to RE taxes is very high. We even looked at Prairie Park (very nice condo development) in Wheeling of all places figuring, hey, it's Wheeling so how high can taxes be? Well, the answer is, about the same as in BG.

Illinois has become a typical very high tax nanny state over the last 20 years or so. It will only get worse. Our BG house has significantly declined in value but our RE taxes increased every single year as the dozens of units of government simply increased their rates to make up for the decrease in assessed valuations. Now, watch what happens. Various taxing districts are touting how they are holding the line on rates. But those rates were inflated to offset the decline in property values. So as prices continue to recover, those inflated rates will be applied and RE taxes will sky rocket as home prices get back near pre recession levels. And yet these politicians will be re-elected since they "are holding the line on taxes", while in reality, they are creating large tax increases. Unfortunately, basic math is not something that the general population is particularly skilled in, so the tax increases continue.

Of course, there is more to it than just taxes and people have different priorities in different stages of their life. I would never subject my kids to Lee County FL schools, so while they were in school, paying high taxes to Districts 96 and 125 was acceptable and I viewed it almost like an investment in their future. But they are now over 10 years out of Stevenson and I am in the process of ratcheting down my career, so I now have different priorities which do not include paying sky high RE taxes without seeing much in return.

It's still expensive compared to FL., but look at Lake Arlington. I found a townhouse at $220K with taxes around $5500. IMO, much better value than condo at Prairie Park. Look into older, yet nice condos/townhomes in BG, Wheeling, AH, Palatine and it seems like the taxes are lower than newer construction.

[Lookout Kid]

Some suburbs with a lot of commercial property have lower residential property taxes (like Schaumburg or Oak Brook). I have always noticed that the taxes in Downers Grove trend quite a bit lower than in surrounding communities for some reason. It's really not as simple as county-to-county comparisons.