October 01, 2024
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MAJOR FINDINGS
Effective property tax rates are a measure of property tax burden for homeowners and businesses. They translate the tax rates on property tax bills into rates that reflect the percentage of full market value that a property owed in taxes for a given year. This report estimates the tax year 2022 (taxes payable in 2023) effective rates for a specific tax code in Chicago and 28 other selected municipalities in northeastern Illinois.[1] Of the municipalities, 12 are in Cook County (including Chicago) and 19 are in collar counties. There are three municipalities included in the study that are located in two counties: Elgin overlaps Cook and Kane counties, Elk Grove Village overlaps Cook and DuPage counties and Naperville overlaps DuPage and Will counties.[2]
In Cook County, six of the 12 selected municipalities experienced an effective property tax rate decrease on residential property in tax year 2022 compared to the previous year. All 12 municipalities in Cook County experienced a decrease across commercial properties between tax year 2021 and 2022. Industrial effective property tax rates in the selected Cook County municipalities for which data were available also decreased over the two-year period. There were not enough sales of industrial property in the Chicago assessment triad and South assessment triad[3] in tax year 2022 for the Illinois Department of Revenue to conduct a statistical analysis of assessment to sales ratios. As a result, the Civic Federation was only able to calculate the 2022 estimated effective tax rates for Cook County industrial properties in the North Triad (see Methodology).
In the collar counties, the effective property tax rate for all types of property decreased by between 2.6% and 9.9% across all 19 municipalities between tax years 2021 and 2022. The largest property tax rate decrease over this same period among the collar counties was the selected tax code in Naperville, which decreased by 9.9%.
In the 10-year period between tax years 2013 and 2022, the effective tax rates for residential property decreased in all the selected municipalities in Cook County except for Chicago, which increased by 2.2% but nevertheless had an effective rate of 1.69%, lower than any of the other selected Cook County municipalities. For commercial properties, most of the municipalities’ effective tax rates decreased, except for Harvey, Barrington and Chicago, which increased by 4.4%, 4.9% and 11.5%, respectively. There were not enough sales of industrial property in tax years 2013 or 2022 in the South Triad, or in 2022 in Chicago, to calculate an effective tax rate. In the collar counties effective tax rates for all types of property declined for all the selected municipalities over the 10-year period examined.
City of Chicago
- The City of Chicago had a residential effective tax rate of 1.69% in 2022, the lowest rate for residential property of the 12 selected Cook County municipalities.[4] The rate decreased from 1.76% the prior year;
- The City’s effective tax rate for commercial properties decreased to 4.29% in 2022 from 4.70% the prior year, the lowest of the 12 selected Cook County municipalities. As noted above, the Civic Federation was not able to calculate an effective tax rate for industrial properties in Chicago in 2022;
- Over the 10-year period between 2013 and 2022, the residential effective tax rate in Chicago increased by 2.2%, from 1.66% to 1.69% of full market value; and
- The commercial effective tax rate also increased by 11.5% between 2013 and 2022, from 3.84% to 4.29% of full market value.
Suburban Cook County: Selected Municipalities (11)
- Between 2021 and 2022 five of the 11 selected suburban Cook County municipalities experienced a decline in residential effective property tax rates while the other six saw flat or increased residential effective tax rates over the two-year period examined;
- Two South suburban municipalities had the highest effective rates for Tax Year 2022, a continuation of a long-term trend reflected in the 10-year analysis. Harvey had the highest 2022 effective tax rates among the 11 selected suburban municipalities, at 4.74% for residential property and 17.41% for commercial property, with Chicago Heights effective rates at 3.2% and 12.1%, respectively;
- All of the selected Cook County suburban municipalities experienced decreases in commercial effective tax rates between 2021 and 2022. Elgin had the largest decrease, at 21.9%, followed by Glenview at 16.9% over the two-year period;
- All of the selected suburban Cook County municipalities experienced a reduction in residential effective tax rates over the 10-year period between 2013 and 2022, and all but two experienced decreases in commercial effective tax rates. The exceptions were commercial properties in Harvey and Barrington. As noted above, the Civic Federation was not able to calculate an effective tax rate for industrial properties in the South Triad in 2022. However, for the North Triad properties, every municipality experienced decreased industrial property tax rates over the 10-year period; and
- Among the selected suburban municipalities in the North Triad of Cook County, the City of Elgin had the highest estimated effective industrial tax rate at 5.72% and the Village of Glenview had the lowest at 4.29%.
Collar counties: Selected Municipalities (19)
- All 19 selected collar county municipalities experienced decreases in effective property tax rates between 2021 and 2022;
- Buffalo Grove had the highest effective tax rate among the 19 selected collar county municipalities in 2022 at 2.72%, which was a 7.7% decline from the 2021 effective tax rate and a 12.5% decline from the 2013 effective tax rate of 3.11%;
- Oak Brook had the lowest 2022 effective property tax rate among the selected collar county municipalities at 1.09%, compared to 1.14% the prior year; and
- Over the 10-year period from 2013 to 2022, all 19 selected municipalities in the collar counties experienced reductions in effective tax rates. Waukegan saw the largest decline of 53.2%, from 5.60% in 2013 to 2.62% in 2022. Lake Forest saw the smallest decrease over the 10-year period, falling 0.8%, from 1.70% in 2013 to 1.68% in 2022.
[1] There are many tax codes in a community, so there will be different estimated effective property tax rates throughout a community, depending on school districts and other taxing bodies’ different tax rates.
[2] These overlapping municipalities were chosen to enable the reader to examine differentials in tax rates that occur in one community.
[3] Cook County is divided into three districts known as “triads” for the purpose of property assessment: Chicago, North and South. North Avenue serves as the dividing line between the North and South suburban triads, such that all Cook County properties outside the City of Chicago and north of North Avenue are in the North triad, and all other suburban Cook County properties are in the South triad. Each district is reassessed every three years. All other counties in Illinois must reassess property every four years. See Appendix for a map of the Cook County assessment districts.
[4] In this report, “residential” refers to Class 2 properties, which are single family homes, condominiums, cooperatives and apartment buildings of up to six units. Larger apartment buildings (Class 3) are not included for the purposes of this report. As discussed later in the report, the estimated residential rate is without homeowner exemptions, which would lower the rate.