(847) 690-9454 info@leifjensenassoc.com

With the progression of the 2019 tax season, I continue to run into the frustration of home owners who have been paying thousands of dollars in property taxes and Illinois Income Taxes, but now can only write off a mere $10,000.

When taxpayers are paying $9,000 to $12,000 in property taxes alone for their small suburban homes, the frustration grows. Most have seen their property taxes double or triple since moving in 10-15 years ago. I know, I am one of them.

This is telling me that Illinois property values are going to start a decline. I expect a fairly rapid decrease within the next 5 years. Oh, the values will go down, but the taxes will just keep increasing. This is Illinois, tax rates never go down, unless you fight them.

Think about it, if you are a buyer, why would you get into a situation where you have to pay an exorbitant amount of taxes and not get the write-off.? You would look at the cost benefit ratio of the deal as a whole.

So older taxpayers are not going to be able to move out their empty McMansions, younger buyer will not be willing to take on the tax burden of these larger homes. Buyers will be looking for a more tax efficient home to raise their family, probably in another state.

These issues are also affecting New York, Texas and California. But those states don’t have the other drawbacks of Illinois, so I don’t expect them to be hit as hard as Illinois. But I would expect a decrease in those states as well.

So the sellers will need to lower their prices to sell, this will start small as it usually does, then it will spiral, in my mind very quickly. My quick dirty estimate is that it will be between 5% and 20%. But I am not a real estate professional.

What are your thoughts on the matter? Let us know.

Pin It on Pinterest