Illinois is a state of financial contradictions. Chicago offers a world-class economy with strong job markets in finance, tech, healthcare, and logistics, while the rest of the state is deeply affordable and largely agricultural. The flat 4.95% income tax is moderate, but Illinois has the 2nd highest property taxes in the nation — averaging 2.07%, which adds $4,000–$10,000+ annually depending on home value. This is the single biggest financial consideration for homeowners. The state also carries significant pension debt, which puts upward pressure on taxes long-term. For renters or remote workers who don’t bear property tax directly, Illinois — especially the Chicago suburbs and downstate college towns — offers strong value for the cost.
Illinois at a Glance
| Metric | Value | National Rank |
|---|---|---|
| Population (2024) | 12.5 million | 6th |
| Median household income | $78,433 | 17th |
| Median home price | $270,000 | Below average |
| Cost of living index | 95 (non-Chicago), 107 (Chicago) | Varies |
| State income tax | 4.95% flat | Average |
| Sales tax (state + local avg) | 8.83% | 3rd highest |
| Property tax (effective rate) | 2.07% | 2nd highest in US |
Income and Housing
| City/Metro Area | Median Income | Median Home Price | Property Tax Rate | Affordability |
|---|---|---|---|---|
| Chicago (city) | $65,800 | $320,000 | 2.10% | Fair |
| Chicago suburbs (DuPage) | $98,400 | $380,000 | 2.05% | Fair |
| Naperville | $125,000 | $475,000 | 2.20% | Good |
| Rockford | $52,200 | $155,000 | 2.85% | Fair |
| Springfield | $62,400 | $145,000 | 1.90% | Good |
| Peoria | $58,400 | $135,000 | 2.25% | Good |
| Champaign | $54,200 | $175,000 | 1.95% | Good |
| Bloomington-Normal | $72,400 | $195,000 | 2.05% | Good |
Property Tax Reality Check
| Home Value | Annual Property Tax (2.07%) | Monthly Cost | National Average (0.99%) |
|---|---|---|---|
| $200,000 | $4,140 | $345 | $1,980 |
| $300,000 | $6,210 | $518 | $2,970 |
| $400,000 | $8,280 | $690 | $3,960 |
| $500,000 | $10,350 | $863 | $4,950 |
Taxes
| Gross Income | Federal | IL Income Tax (4.95%) | FICA | Property ($270K) | Total Rate |
|---|---|---|---|---|---|
| $75,000 | $8,115 | $2,970 | $5,738 | $5,589 | 29.9% |
| $100,000 | $13,615 | $4,208 | $7,650 | $5,589 | 31.1% |
| $150,000 | $25,915 | $6,683 | $10,878 | $5,589 | 32.7% |
Illinois Pros and Cons
| Financial Pros | Financial Cons |
|---|---|
| Affordable housing outside Chicago | 2nd highest property taxes in US |
| Major job market (Fortune 500 HQs in Chicago) | Population declining (outmigration) |
| No tax on retirement income | 3rd highest sales tax (8.83%) |
| Flat income tax (4.95%) | Pension crisis = future tax risk |
| World-class city amenities (Chicago) | High auto insurance in Chicago |
| Strong union protections | Cold winters = heating costs |
Related: Cost of Living by State | State Income Tax Rates | Property Tax by State | Average Rent by State