Illinois Vs Missouri Home Taxes (St. Louis, St. Charles: how much, houses, buying) - (MO) - City-Data Forum

cutelili · 03-16-2009, 05:14 PM

Hi,

We are trying to buy a property around Saint Louis and as we are close to Illinois, Illinois it could also be...

We of course found some charming (to us) houses there, but I can't believe the amount of taxe per year!

Whilst in St Louis it is almost matching the price of the house to some degrees (ie: a house of $500 000, its taxe is $5000 or so per year), in Illinois it seems to be multiplied by two and some other area by 3, so a house of let's say $450000 can pay taxes as high as $12000 per year...

I cannot explain why... is there any logic about this, or would it be because other things are cheaper in Illinois, or do they have better schools?

Do you make sense of this difference of home taxes between these 2 states (very close though)?

Tenn.Sunshine · 03-16-2009, 06:46 PM

I think this is a great question. We are also looking to move to St. Louis (but not for a few years), and this something I would like to know as well.

bls5555 · 03-16-2009, 06:50 PM

Nothing is better in Illinois, they just charge you more. Said with some sarcasm but noth much. Move to the Missouri side if you are going to be in a suburb.

Illinois property taxes are very very high. Other than that I don't think there is to much difference on a lot of things. You will pay Personal Property Tax on you cars and boats in Missouri. You won't in Illinois. It costs a lot to get your license plates and license in Illinois. It doesn't in Missouri. Every state has different ways to *********, some are just a bit worse. Illinois is worse than Missouri.

I did just see that they are contemplating an Income tax increase in Illinois. If you are buying a 500,000 house you are probably going to be in the bracket that gets the highest increase. It was something like a 50% increase.

If you are going to some small town in Illinois you really like then I would say do it. If you are just looking at a suburb such as O'Fallon or Glen Carbon IL, then I would suggest going to the Missouri side somewhere.

johnamus · 03-16-2009, 09:19 PM

This tax disparity has been priced into the market and you will find that similar houses will sell for less money in Illinois vs Missouri. Not that the market is completely efficient, but for the most part you will see that total monthly payments should roughly equal out when taxes are taken into consideration. Another factor that affects housing is the fact that Illinois has a flat state income tax, this system is particularly beneficial to higher income folks when compared to the progressive MO tax structure. The effect is seen in the gradual fading of the Illinois housing discount as you look at more and more expensive houses.

The IL/MO area of St Louis is a free market and as a result you will find that neither side has an impartial price advantage. Certain people desire to live in one state or another based on personal reasons rather than broad cost of living reasons.

This is kind of off-topic but I digress: don't buy into the anti-Illinois fever that St Louisans tend to display. While the Missouri side is great, Illinois has a lot to offer. A typical St Louisan doesn't know that the East St Louis/Cahokia area has more historical ties in one block than the entire downtown of St Louis.

TGS · 03-17-2009, 07:32 AM

Quote:

Originally Posted by johnamus

A typical St Louisan doesn't know that the East St Louis/Cahokia area has more historical ties in one block than the entire downtown of St Louis.

What does this mean? Historical ties to what? Both sides of the river are historic.

If you are talking about the Cahokia mounds, then I would say that most St. Louis residents know about it, but there isn't much to see, as opposed to the downtown buildings on the Missouri side that are still intact and in use.

I don't think that anyone could honestly say that in the present day, East St. Louis/Cahokia is a better place to live than Downtown St. Louis.

cutelili · 03-17-2009, 07:34 AM

Thanks for both responses, I appreciate, I am starting to be clearer...but I am not yet there...

Johnamus, you say: "Illinois has a flat state income tax, this system is particularly beneficial to higher income folks when compared to the progressive MO tax structure"

So would I be better off to work in MO and pay my tax on revenue in IL? What is that flat state income tax? How much tax do people pay in IL?

So, if I were earning $100 000 salary, how much tax revenue would I pay in IL? and in MO?

And if it is so beneficial for the well off, why would not people choose to live in IL instead of MO, or in other words, why do some people choose to live in MO whilst they could benefit from living in the IL side?

And how can poor people live there with such high property tax, and another question, why do they stay there? it does not make sense to me...

aragx6 · 03-17-2009, 07:44 AM

Flat income tax is Illinois is 3%, but there's talking about raising it very soon, so definitely look into that.

Poor people rarely own homes, so I assume you're asking about middle and working class families -- they probably stay because they've lived there a long time, it's closer to their job and homes have typically been less expensive -- same reasons anyone stays anywhere I guess.

The IL side is farther from a lot of the amenities of the metro area. People always try to claim on here that there is some sort of grand dislike for metro St. Louisans who live in Illinois, but I've rarely, if ever, seen that displayed -- I just don't think the exurbs, which honestly is what almost all of the Illinois suburbs feel like, have much to offer in the way of amenities.

I would say the same thing to anyone looking on the edges of the metro area in any direction, though I will say that if cookie cutter exurbs and older small towns are your thing, then Illinois is a good choice as it's considerably closer to St. Louis than many suburbs out in St. Charles in the west or Jefferson county in the south.

cutelili · 03-17-2009, 08:37 AM

ok... interesting

we do like old houses, true... but we were not choosing IL or MO... we are looking for a home that fits our needs, that we feel good in, and fits our purse... until we realised this difference in Taxe...

Thank you very much for all your help, helping me to understand the difference... I need to find those articles now on this soon raise on income tax... especially since buying is "easy" considering to selling... so we cannot make a mistake we would regret...

aragx6 · 03-17-2009, 08:41 AM

Here ya go: Illinois income tax rate may rise by 50% -- chicagotribune.com

cutelili · 03-17-2009, 09:30 AM

Thank you. I think this is a mistake to do this in this difficult time when anybody's job is in jeopardy and from what I have seen in this side of Illinois; it is good for them to have some people who can invest in properties too, and you have to attract these kind of people for diversity and help an area to develop, otherwise if you take them all through taxes, they will leave or not buy there, there won't be diversity at the end, and the area will not develop.

I think they should keep it as it is and stop wanting to take more money to those who can provide some work or even nice things in an area...

When would this take place do you think?

Is it worth buying there then?