Illinois Tops U.S. Property Taxes Amid Pension-Funding Strains

Property taxes are rising significantly across the United States, outpacing inflation by nearly 27% since 2020, with Florida experiencing notable increases despite not being in the top 10 states for the fastest growth. Illinois now holds the highest property tax rate in the country, with homeowners facing an average effective rate of 1.83%, a burden compounded by high income and sales taxes, which has contributed to a population decline as residents seek lower-tax states. Several states, including Montana, New Jersey, and Rhode Island, have recently increased taxes on luxury real estate, second homes, or high-value properties to generate revenue for various state priorities such as tax relief for full-time residents or funding low-income housing. Meanwhile, the affordability crisis extends to new construction homes, where high prices and interest rates are pushing many current homeowners to invest in renovations rather than move, reflecting a shift in housing market dynamics. Additionally, credit card debt in the U.S. has reached $1.3 trillion in 2024, with significant regional disparities influenced by factors like cost of living and median income, though this financial stress is separate from the property tax issue. Overall, rising property taxes and housing costs are reshaping homeowner decisions and state fiscal policies across the country.