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Illinois homes are reasonably priced, but the state's effective property tax rate is among the very highest in the U.S.: the median bill is close to 2% of the median home's value. In much of the state the tax line can equal half of principal and interest. Cook County reassesses one third of the county each year on a triennial cycle, so a bill can jump in a reassessment year. Outside Cook County, assessments are set at one third of market value and then multiplied by a state equalizer, so the bill depends on several local steps. A home can sit in a dozen or more taxing districts, including school, park, library, township and sanitary districts.

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Starting values: $280,700, which is the Illinois median (34th of 51), 20% down and a 7.40% rate. Monthly cost: $2,127.22 ($1,554.81 loan, $449.08 property tax, $123.33 homeowners insurance). Put 5% down and add PMI and it rises to $2,529.86.

Homestead exemptions and property tax relief

The General Homestead Exemption cuts the equalized assessed value of an owner-occupied home by $10,000 in Cook County, $8,000 in counties next to Cook, and $6,000 elsewhere. Seniors get an extra exemption, and the Senior Assessment Freeze holds value steady for eligible lower-income owners. Cook County renews the general exemption automatically once you have it, but a new owner must apply.

First-time buyer programs

The Illinois Housing Development Authority's IHDAccess Forgivable program gives up to 4% of the price (maximum $6,000) for down payment and closing costs. It is forgiven monthly over 10 years and is open to repeat buyers as well as first-timers. You contribute $1,000 or 1% of the price, whichever is greater, and complete homebuyer counseling.

Transfer and recording taxes

The state transfer tax is $0.50 per $500 and counties add $0.25 per $500, for a combined $1.50 per $1,000 that the seller customarily pays, or about $421 on a $280,700 home. Chicago adds its own tax of $5.25 per $500: the buyer generally pays $3.75 (0.75%) and the seller pays $1.50 (0.3%) for the CTA.

Closing costs to plan for

Attorneys handle most Illinois closings, so budget for your own. Property taxes are paid a year in arrears, so the seller usually credits the buyer for the current year's unpaid tax at closing. Check that credit, because it can be large.

When property tax bills are due

Illinois property tax is paid in arrears: the bills you pay in a given year are for the previous year's taxes. In Cook County the first installment is an estimate due around March 1 and the second, final installment comes in the fall. Most other counties bill two installments in late spring and late summer. At closing the seller usually credits the buyer for taxes owed but not yet billed, so check the proration math.

Before you buy in Illinois

The general homestead exemption cuts equalized assessed value by up to $10,000 in Cook County, $8,000 in the counties next to Cook, and $6,000 elsewhere on an owner-occupied principal residence. Ask the county assessor how to claim it, because the seller's exemption may not carry over. The state transfer tax is $0.50 per $500 of price and is generally paid by the seller; Cook County adds $0.25 per $500.

2026 loan limit in Illinois

FHFA 2026 one-unit conforming limits: no county is high-cost, so $832,750 applies statewide. So $224,560, the 80% loan on a median home, needs no jumbo financing.

Illinois numbers used above

MeasureIllinoisU.S.
Median home value (ACS 2024)$280,700$360,600
Effective property tax rate1.92% (1st highest)0.89%
Average HO-3 premium (NAIC 2023)$1,480$1,737
Median household income$83,211$81,604
Median gross rent$1,322$1,487
Income needed at 28% (20% down)$91,167–

Frequently asked questions

Why is my first Cook County bill different from the listing?

Bills are paid a year late and exemptions do not carry over, so apply for yours right after closing.

What is the median-home payment in Illinois?

About $2,127.22 a month on a $280,700 home with 20% down at 7.40%, including tax and insurance.

What income do lenders want for that?

Roughly $91,167 a year under the 28% rule, or $108,423 with 5% down and PMI.

How does Illinois insurance compare?

The 2023 average HO-3 premium was $1,480, below the $1,737 U.S. average.

Sources

See also: all states · house affordability · Illinois paycheck