For decades, Illinois property taxes have been debated throughout the state. Illinois now carries one of the highest effective property tax rates in the nation, tied for the top spot and a leading reason residents cite for leaving, and this page walks through the formula, the government structure, and the state-level decisions behind that number.
Eight terms and a three-step process, set by state law, determine every dollar of your bill.
The vocabulary behind every property tax bill in Illinois.
The three-step process that turns assessed value into a final tax bill, plus the formula and a worked example.
Illinois has one of the highest effective residential property tax rates in America, statistically tied with New Jersey. Every structural driver behind that number is documented and measurable.
New Jersey and Illinois both round to 1.88%; Tax Foundation's rank places New Jersey narrowly ahead.
On average, Illinoisans pay approximately $4,584 in annual property taxes (2023), contributing to affordability concerns and population outmigration from the state.
Source: Illinois Policy Institute
Every local government unit can levy property taxes. Illinois has more of them than any other state, and schools consume the largest share of every bill.
While the 2022 Census of Governments found 6,930 units, the Civic Federation estimates 8,923. The difference in methodology is that the Civic Federation includes all districts regardless of autonomy or tax capability. Census uses a conservative methodology that still shows a high excess in Illinois.
Actual taxing bodies (or taxing districts) are local government units authorized by law to levy property taxes to fund their services. These districts are typically overlapping, meaning a single property owner may pay taxes to several different entities simultaneously.
Illinois funds its K-12 system more heavily through property taxes than almost any other state, making school districts the single largest driver of the average tax bill.
Property taxes made up 58% of school district revenue in 2015. Note: the term “organizational units” includes alternative education programs and special education cooperatives, not just traditional districts (per NCES). Sources: National Center for Education Statistics and Illinois State Board of Education.
School districts account for over 58% of total property tax expenditures.
States use a handful of common tools to slow property tax growth. Illinois relies on one of them, but it does not cap what you actually pay.
A property tax cap or limit is a legal restriction on how much property taxes can grow from year to year. These limits are usually set by state law and apply to local governments (counties, cities, school districts, etc.). Each state uses different mechanisms to control property tax growth, but three common methods are widely used:
Illinois relies on a revenue-extension limit, but it caps the total tax collected by a government, not the bill any one homeowner pays.
PTELL (Property Tax Extension Limitation Law) is Illinois state law that limits how much a local government's total property tax revenue can grow each year in Illinois.
Source: Illinois Policy
PTELL's "5% or CPI, whichever is less" language sounds modest, but 5% compounds fast. Adjust the starting levy and the number of years to see how far apart the legal ceiling and typical inflation-driven growth can drift.
Illustrative model based on PTELL's statutory cap; actual results vary by taxing body and by year's CPI.
Exemptions reduce taxable base but shift costs to other taxpayers. When many properties are exempted, rates rise for remaining taxpayers. Total statewide property tax levy: $38.5 billion (FY23).
Source: Illinois Department of Revenue (IDOR). Each pill links to the exemption's statute in the Illinois Compiled Statutes.
TIFs use future property tax increases to fund local improvements. The Midwest has the most TIF districts in the nation. Texas, Pennsylvania, Maine, Florida, California, and Colorado are the only states in the nation that have over 100 districts and are not located in the Midwest. TIFs are intended to stimulate business growth.
The frozen base EAV keeps funding schools, counties, and other taxing bodies as before. Every dollar of growth above that base (the "increment") is redirected to the TIF district's redevelopment fund instead. This is an illustrative model, not a specific district.
When Illinois cut its share of income tax revenue to local governments, those governments had to find money elsewhere. They found it in property taxes.
The Local Government Distributive Fund (LGDF) in Illinois is a major state-shared revenue program that distributes part of the state income tax to local governments (cities, villages, and counties). The LGDF was created in 1969 when Illinois enacted its first state income tax. As part of the political compromise:
Source: Illinois Municipal League
Historically, the LGDF share of Illinois income tax revenue was 10%. However, from 2010 to 2025 the share declined to about 6–6.5% due to state budget changes and income tax policy adjustments, resulting in significantly less revenue for local governments than they were supposed to receive.
Source: Illinois Policy
The LGDF share decline occurred across the administrations of Gov. Pat Quinn and Gov. Bruce Rauner, a pattern of state budget decisions that shifted the funding burden onto local property taxpayers.
“No worries, property taxes will take care of it.”
Source: Illinois Municipal League
Source: Illinois Policy
Senator Balkema has co-sponsored 34 property-tax-related bills this session, from senior exemption updates to assessment caps, estate tax relief, and foreclosure reform.
SB2246 caps annual assessed value increases at the rate of inflation. When home values surge, as they did during 2021–2023, your assessment could only grow by the CPI rate. This chart shows what that would have meant for a median Illinois home.
Caps annual increases in residential property assessed value at the rate of inflation, excluding increases from additions or improvements. Preempts home rule authority on the subject.
Creates a property tax homestead exemption for homeowners who have continuously owned and lived in their primary residence for at least 30 years, with annual reapplication required.
Amends the Illinois Income Tax Act to make the credit for residential real property taxes refundable, providing direct relief for lower-income homeowners. Effective immediately.
Increases the General Homestead Exemption each year beginning in tax year 2027 by tying the maximum exemption amount to the Consumer Price Index.
Every property-tax-related bill Senator Balkema has co-sponsored this session. Search by bill number or keyword below.
| Bill | What It Does |
|---|---|
| SB1050 | TIF Act Technical ChangeAmends the Economic Development Project Area Tax Increment Allocation Act of 1995. Makes a technical change in a Section concerning the short title. |
| SB0134 | Spousal Estate Tax Exemption PortabilityAllows the unused Illinois estate tax exemption of a deceased spouse to be transferred to a surviving spouse, similar to federal estate tax rules, for deaths occurring on or after January 1, 2026. |
| SB0139 | Aligns Estate Tax Exemption to Federal LevelAligns Illinois' estate tax exemption with the federal estate tax exemption beginning January 1, 2026, replacing the current $4 million exemption with the federal exclusion amount. |
| SB0215 | Assessment Appeal WindowRequires chief county assessment officers to accept property tax assessment appeals for at least 30 business days from the later of the date the notice is mailed or published online. Effective immediately. |
| SB1207 | Probate Estate Tax ReliefAllows property tax interest and penalties to be waived on property in a deceased person's probate estate, from the date of death until the property is transferred, sold, or the estate is closed. |
| SB1364 | Foreign Land Ownership RestrictionsExpands restrictions on foreign ownership of Illinois land, prohibiting certain foreign-controlled entities from acquiring agricultural land, with a two-year divestment requirement. Creates an Office of Agricultural Intelligence. |
| SB1523 | Property Fraud ProtectionsIncreases protections against real estate fraud by allowing property owners to sue those who file fraudulent property records, requiring counties to create property fraud alert systems. |
| SB1643 | Senior Freeze CPI AdjustmentProvides that the maximum income limitation for the low-income senior citizens assessment freeze homestead exemption shall be increased each year by the CPI, beginning in taxable year 2025. |
| SB1831 | Property Tax Abatement for New ConstructionCo-sponsored with Sen. Chapin Rose. Allows a property tax abatement for new residential construction developments located in counties with fewer than 300,000 inhabitants. |
| SB1688 | Farm Property Estate Tax ReliefIncreases the estate tax exemption for estates including qualified farm property from $4 million to $6 million, indexed annually for inflation, and updates farm valuation and spousal transfer rules to help preserve family farms. |
| SB1735 | Phases Out the Estate TaxReduces the Illinois estate and generation-skipping transfer tax by 20% each year, eliminating it entirely for deaths and transfers occurring on or after January 1, 2030, with the Act repealed January 1, 2031. |
| SB1763 | Online Assessment Roll PublicationAllows any county recorder to publish property assessment rolls in a newspaper of general circulation or on the county's public-facing website. |
| SB1828 | Repeals the Estate TaxEliminates the Illinois estate and generation-skipping transfer tax entirely for deaths and transfers occurring on or after the bill's effective date. |
| SB1862 | Long-Term Homeowner ExemptionCreates a property tax homestead exemption for homeowners who have continuously owned and lived in their primary residence for at least 30 years, with annual reapplication required. |
| SB2086 | Senior Freeze Income Limit IncreaseRaises the income limit for the Low-Income Senior Citizens Assessment Freeze Homestead Exemption to $75,000 for 2025, with annual CPI-based adjustments thereafter. |
| SB2093 | Refundable Property Tax CreditAmends the Illinois Income Tax Act. Provides that the credit for residential real property taxes is refundable. Effective immediately. |
| SB2102 | Electronic Levy FilingAllows taxing districts to file budget, appropriation, and revenue estimates electronically with the county clerk, who must acknowledge receipt. |
| SB2246 | Assessment Value CapCaps annual increases in residential property assessed value at the rate of inflation, excluding increases from additions or improvements, and preempts home rule authority on the subject. |
| SB2701 | Senior Exemption Auto-RenewalProvides that, for taxable years 2026 and thereafter, a taxpayer who has been granted a senior citizens homestead exemption need not reapply for that exemption annually. |
| SB2745 | Disabled Exemption Renewal SimplifiedAllows permanently and totally disabled homeowners to reuse original disability documentation when renewing the Homestead Exemption for Persons with Disabilities, eliminating repeated annual examinations. |
| SB2746 | Senior Freeze Income Limit ($75K)Provides that, for taxable years 2026 and thereafter, the maximum income limitation for the low-income senior citizens assessment freeze homestead exemption is $75,000 for all qualified property. |
| SB2750 | Fallen Officer Spouse ExemptionExempts from property taxes the primary residence of a surviving spouse of a law enforcement officer killed in the line of duty. |
| SB2970 | Farm Estate Tax Exemption IncreaseIncreases the estate tax exemption for estates containing qualified farm property from $4 million to $6 million, indexed for inflation, to ease generational farm transfers. |
| SB3243 | Assessment List Publication OptionsProvides that any recorder may publish property assessment lists in a newspaper of general circulation in the county or on the county's public-facing website. |
| SB3543 | Interest on Estate Tax RefundsRequires interest to be paid on estate tax refunds resulting from overpayment if the refund isn't issued within 30 days of the filing deadline or the date of overpayment, whichever is later. |
| SB3787 | Ties Estate Tax Exclusion to Federal LevelFor deaths on or after January 1, 2027, sets the Illinois estate tax exclusion to match the federal exclusion amount, including inflation adjustments and unused spousal exclusion, up from the current $4 million. |
| SB3847 | Raises Estate Tax Exclusion to $8 MillionFor deaths on or after January 1, 2027, sets the Illinois estate tax exclusion at $8 million, adjusted for inflation starting 2028 and including any unused spousal exclusion. |
| SB3490 | Foreign Land Ownership RestrictionsExpands Illinois restrictions on foreign ownership of land, prohibiting certain foreign-controlled businesses and foreign parties from acquiring land, including agricultural land, with a two-year divestment window and a new Office of Agricultural Intelligence to enforce it. |
| SB3494 | Tax Sale Redemption ExtensionExtends the property tax sale redemption period from 2.5 to 5 years and allows tax deed holders to petition for a judicial sale of the property. |
| SB3781 | Refundable Property Tax CreditAmends the Illinois Income Tax Act. Provides that the credit for residential real property taxes is refundable. Effective immediately. |
| SB3782 | Foreclosure Reform Task ForceCreates the Fairness in Property Tax Foreclosure Task Force to study property tax foreclosure practices and develop reform recommendations. |
| SB3849 | CPI-Indexed Homestead ExemptionIncreases the General Homestead Exemption each year beginning in tax year 2027 by tying the maximum exemption amount to the Consumer Price Index. |
| SB3938 | Optional Site Value TaxCreates an optional Site Value Tax that local taxing districts may adopt by ordinance, applied only to land value excluding buildings and improvements. |
| SB4029 | Senior Freeze CPI Adjustment (2029)Provides that the maximum income limitation for the low-income senior citizens assessment freeze homestead exemption shall be increased each year by the CPI, beginning in taxable year 2029. |
Bill numbers link to each bill's official status page on the Illinois General Assembly website (104th General Assembly).
View the full presentation containing much of the property tax data and analysis featured throughout this site.