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Own Luxury Homes® Illinois / Chicago Tax and Property Crisis Index™
Own Luxury Homes® Illinois/Chicago Tax and Property Crisis Index™: Illinois 4.95% flat income tax + Cook County ~2.1% effective property tax. $1M income earner: $49,500/yr IL state tax vs. FL $0. $2M North Shore home: $44,000-$52,000/yr in property tax vs. FL $16,600. Illinois: $200B+ unfunded pension liability (COGFA) — structural driver of 5-8%/yr property tax increases; 20-year North Shore tax trajectory compounds to $116,900/yr vs. FL SOH-capped $22,300/yr. IL #2 in national net out-migration. Own Luxury Homes® 12-Point Agent Integrity Audit™.
Own Luxury Homes® Illinois / Chicago Tax and Property Crisis Index™
Illinois presents a paradox: a flat 4.95% state income tax that sounds moderate — until it is combined with Cook County property taxes that rank among the highest in the Midwest, a $200+ billion unfunded public pension liability that markets have priced into long-term residency risk, and the second-highest net domestic out-migration of any state in the country. The financial case for Illinois residents to establish Florida domicile is not as extreme as California or New Jersey on income tax alone, but the property tax burden and political risk premium make the combined argument increasingly compelling for affluent Chicago-area homeowners.
01 — Illinois Income Tax vs. Florida by Income Level
| Annual Income | IL Tax (4.95%) | FL Tax (0%) | Annual Savings IL → FL | 10-yr Simple | 20-yr Compounded (6%) |
|---|---|---|---|---|---|
| $150,000 | $7,425 | $0 | $7,425 | $74,250 | ~$273K |
| $300,000 | $14,850 | $0 | $14,850 | $148,500 | ~$545K |
| $500,000 | $24,750 | $0 | $24,750/yr | $247,500 | ~$908K |
| $1,000,000 | $49,500 | $0 | $49,500/yr | $495,000 | ~$1.82M |
| $2,000,000 | $99,000 | $0 | $99,000/yr | $990,000 | ~$3.63M |
| $5,000,000 | $247,500 | $0 | $247,500/yr | $2,475,000 | ~$9.09M |
02 — Cook County Property Tax: The Hidden Second Layer
| Chicago / Suburban Area | Effective Rate Est. | Annual Tax on $1M Home | Annual Tax on $2M Home | FL Comparison |
|---|---|---|---|---|
| Chicago (city proper, prime neighborhoods) | 2.0–2.5% | $20,000–$25,000 | $40,000–$50,000 | FL: $8,300 / $16,600 |
| Lincoln Park / Lakeview / Gold Coast | ~2.0–2.2% | $20,000–$22,000 | $40,000–$44,000 | FL: $8,300 / $16,600 |
| Winnetka / Kenilworth (North Shore) | ~2.2–2.5% | $22,000–$25,000 | $44,000–$50,000 | FL: $8,300 / $16,600 |
| Hinsdale / Western suburbs | ~2.0–2.3% | $20,000–$23,000 | $40,000–$46,000 | FL: $8,300 / $16,600 |
| Lake Forest / Lake Bluff (far North Shore) | ~2.3–2.6% | $23,000–$26,000 | $46,000–$52,000 | FL: $8,300 / $16,600 |
| Sources: Cook County Assessor; ATTOM. Effective rates are averages; actual rates vary by specific address, property type, and exemptions. Cook County assessments have been contested in recent years due to allegedly inconsistent methodology. | ||||
03 — The Pension Liability Risk Premium
Illinois’ $200+ billion unfunded pension liability is not a fixed cost — it is a growing obligation that must be funded primarily through property tax increases (since the Illinois constitution prohibits pension benefit reductions and the state income tax is flat without ability to selectively raise it).
The Cook County property tax escalation trajectory:
• Cook County property taxes increased by approximately 5-8% annually in many jurisdictions over the 2018-2024 period
• Teacher pension contributions alone from local school districts represent a growing mandated cost
• Actuarial estimates project continued 3-6% annual increases in pension costs through 2035
For a buyer purchasing a $2M home in the North Shore today at $44,000/yr in property taxes: a 5% annual increase compounds that payment to approximately $71,700/yr by year 10 and $116,900/yr by year 20. The same FL property at $16,600/yr today compounds to approximately $22,300/yr at year 10 under the FL SOH 3% cap.
The 20-year property tax comparison is not $44K vs. $16.6K annually — it is $44K-and-rising vs. $16.6K-capped. This is the risk premium that many affluent Chicago-area homeowners are now pricing into their relocation timeline.
Brown, Ryan. “Own Luxury Homes® Illinois / Chicago Tax and Property Crisis Index™.” Own Luxury Homes®. https://www.ownluxuryhomes.com/markets/national/research-indices/illinois-chicago-property-tax-crisisMedia: ownluxuryhomes.com/connect · 407-900-7030
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— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)