October 02, 2024
The Civic Federation has released its estimate of effective property tax rates in the six-county region of northeastern Illinois.
The full report is available at civicfed.org/Effective_Property_Tax_2013_2022. Included are interactive maps showcasing the effective residential, commercial and industrial property tax rates of several municipalities in northeast Illinois.
Among the 12 selected Cook County municipalities, Harvey had the highest effective tax rate for residential properties at 4.74% in tax year 2022 (down from 5.17% in 2021), while Chicago had the lowest residential rate at 1.69% (down from 1.76% in 2021). Harvey and Chicago have also had the highest and lowest estimated effective residential rates, respectively, during the prior 10 years.
From 2013 to 2022, Harvey’s estimated effective residential tax rate decreased by 41.4%. Chicago’s rose by 2.2%. Most notably, Chicago Heights’ estimated effective residential rate decreased by 42.5%.
Over the same period, Chicago’s estimated effective commercial tax rate increased by 11.5%, but remained the lowest estimated rate in Cook County in 2022 at 4.29%. Harvey’s estimated effective commercial rate increased by 4.4% and was also the highest in the County at 17.41%.
The full report also analyzes trends for selected municipalities in the collar counties of DuPage, Kane, Lake, Will and McHenry. Among these municipalities, Woodstock again had the highest 2022 effective property tax rate at 2.67% and Oak Brook again had the lowest rate at 1.09%. All collar county municipalities analyzed experienced decreases in their estimated effective property tax rates between 2021 and 2022.
“While these estimates are powerful for showing high-level trends over time, individual properties’ trends may be different from the estimate,” said Joe Ferguson, president of the Civic Federation. “Two general trends are noteworthy. First, the differential between Chicago and the suburbs has returned to closer to what it was prior to the disruption of the Great Recession in the 2000’s. Second, effective residential and commercial rates in economically hard-pressed south suburban jurisdictions — represented here in the analysis of Harvey and Chicago Heights — remain comparatively high.”
Effective 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 owed in taxes by a property in a given year. Effective tax rates allow an apples-to-apples comparison of tax burden across municipalities and over time. This report covers the period between 2013 and 2022, the most recent year for which comparable data are available.
Changes in effective tax rates over time are a product of changing actual composite tax rates, changing median levels of assessment and changing equalization factors. To calculate effective tax rates, the median level of assessment is first multiplied by the equalization factor to approximate the percentage of a property’s total value that is taxed. (Both the median level of assessment and the equalization factor are calculated annually by the Illinois Department of Revenue.) This percentage is then multiplied by the actual tax rate to produce the effective tax rate.
To calculate the effective tax rate for an individual property, a property owner would divide the tax liability for a property into its estimated market value for the same year. Thus, a property with a tax liability of $6,000 and an estimated market value of $300,000 would have an effective property tax rate of 2%.