Illinois real estate: property tax, closing costs & insurance
Illinois property tax is driven by Cook County’s assessment structure and a state equalizer factor that most out-of-state investors have never heard of, pushing effective rates over 2% even though the flat state income tax is a modest 4.95%.
Property tax in Illinois
The effective rate runs about 2.08% of assessed value. Residential property is assessed at 33.33% of market value before that rate applies, so the millage number quoted locally is not applied to the full price. Cook County 10% assessment level for residential + state equalizer (~3.0). Effective ~2.1%.
Transfer tax & closing costs
State $0.50/$500 + county $0.25/$500 seller. Chicago CTA/City: buyer $3.75/$500 + seller $1.50/$500. Recording runs a flat $110. Title insurance is customarily paid by the seller, with a minimum owner’s premium of $1,100.
Insurance & capital gains
Hail belt; no wind deductible. Flat 4.95%.
Worked example: a $350,000 ARV flip in Illinois
Six-month hold, $45,000 rehab, 15% target profit margin, all-cash. This is the same reverse waterfall the calculator runs — see it live for your actual property.
- After-repair value$350,000
- Rehab budget−$45,000
- Closing costs — acquisition−$5,875
- Closing costs — disposition−$19,975
- Holding costs, 6 months−$4,274
- Target profit, 15%−$52,500
- Maximum Allowable Offer$222,376
If you’re investing
In Cook County, get the current equalization factor before you trust any quoted millage rate — the effective rate is assessed value × assessment ratio × equalizer × millage, and skipping the equalizer step understates the real bill significantly.
If this is your home
Chicago adds its own transfer tax on top of the Illinois state and county rate ($3.75 buyer + $1.50 seller per $500 inside city limits), so the same house costs measurably more to close on inside Chicago than in a nearby suburb.
Best suited for: Investors comfortable underwriting a higher, more complex property tax calculation in exchange for Midwest price points.
Illinois FAQ
Why is Cook County property tax so complicated?+
Cook County assesses residential property at 10% of value, then applies a state equalization factor (currently around 3.0) before the local millage rate is applied — two extra multiplication steps most states don’t have.
Does Chicago have its own transfer tax?+
Yes, on top of the Illinois state transfer tax (seller, $0.50/$500) and Cook County tax (seller, $0.25/$500), the City of Chicago adds $3.75 per $500 paid by the buyer and $1.50 per $500 paid by the seller.
See the exact number for your Illinois property
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Other state guides
Sources: state and county assessor publications, state department of revenue transfer-tax schedules, and title-rate manuals filed with each state’s insurance regulator, effective 2025-01-01. Figures are estimates for planning purposes, not tax or legal advice — confirm with a licensed professional before closing. How the calculator works