That's sort of the rub. I'm actually intending to move to Illinois. I'll pay about the same in real estate taxes as I do here, about twice the rate based on the home's market value, but I'll pay maybe as little as half the money per sq ft to buy a home.jacob wrote:Yay, the only way from here (IL) is up!
The RE tax rate in IL is nasty. We pay $4000/year which is 40% of our budget! Conversely, the tax on groceries which is most of our discretionary spending (about 20% of our budget) is 1% and because the RE tax is really high, the home prices are low as the market folds the cost of paying the RE tax into the mortgage costs which in turn depresses the housing prices. IOW, the upfront house costs are low.
The linked article was based on data from here https://wallethub.com/edu/best-worst-st ... ayer/2416/
I'm very interested to see they rank California in the top 10 tax friendly states. Makes me think there's a kink in their system w.r.t basing things on a "national median" household ($53K income/$175,000 home value) then applying it to various individual states across various cost of living areas. Take their $175,000 home value assumption. It's likely difficult to find any home at that low a price where most Californians live (the California median home price is north of $450,000 last I checked). A $175,000 home in my hometown (Rockford, IL) is pretty far up the scale. My aunt just bought one for that price. It's north of 3000sq ft, and sits on almost 2 wooded acres within the city limits in an established/wealthy, centrally located, and safe neighborhood. Not even close to a median home for the area, which is about $60K (and would probably be taxed at less than $1500). Illinois also has a flat income tax which separates them in a positive sense from areas like the coasts for the half of the population that makes above median income who start to get hit hard with progressive income tax schemes.
To be fair Rockford is probably somewhat below Illinois as a whole regarding real estate prices due to a property tax special assessment for schools that gives them among the highest property tax rates in the country, but as jacob points out, that tends to self adjust by lowering prices and balancing the net out of pocket for property tax with that of similar homes in the surrounding communities. Illinois is also fairly tax friendly for retirees, as basically no retirement income (SS, pensions, 401k and similar) is taxed. It isn't the cheapest place out there by any stretch when it comes to the state stuffing its hands into your pockets, but it's not the worst either (yet, until their state pension woes catch up with them).
In any state these things get skewed by the specifics of the largest, most desirable metro areas. There are "bargains" to be had anywhere if you're willing to live away from all the cool people.