Cost of Living in Illinois
Things cost about the same here as the national average.
What Things Cost in Illinois
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Illinois is a tale of two states. Chicago and its suburbs are a world-class metro with costs above the national average. Downstate Illinois is deeply affordable, with some of the lowest housing costs in the Midwest. The statewide average lands below the national baseline at about 96, but that masks the real story. The state's defining financial feature is property tax: Illinois has the second-highest effective property tax rate in the nation at roughly 2.07%. On a $235,000 home, that is nearly $4,900 per year, a burden that has driven residents south and west for decades.
Illinois at a Glance
Taxes in Illinois
Illinois's state income tax tops out at 4.95% flat. The combined sales tax averages 6.25%. Property taxes run about 1.88% of home value, which on a $235,000 median home means roughly $4,418/year.
Cities in Illinois
Ranked from least to most expensive. Index 100 = national average.
Explore Illinois
FAQ About Illinois
Illinois relies heavily on property taxes to fund local governments, school districts, and public pensions. The state has nearly 7,000 units of local government, more than any other state, each with taxing authority. Underfunded pensions create additional pressure. Cook County (Chicago) has some of the highest rates, but even suburban and downstate rates are well above national averages. A $300,000 home in the Chicago suburbs can generate over $7,000 per year in property taxes.
By major-city standards, yes. Chicago's housing costs are roughly half of San Francisco's and significantly below New York, Boston, and LA. Median rent in Chicago is about $1,350 and median home prices are around $341,200. The caveat is property taxes, which add a substantial ongoing cost that does not exist to the same degree in cities located in low-property-tax states. Overall, Chicago offers big-city amenities at a moderate big-city price.
No. Illinois is one of the most retirement-friendly states for taxes. It does not tax Social Security benefits, pension income, 401(k) and IRA withdrawals, or any other retirement income. This is a major advantage, particularly for retirees who own their home and have paid off the mortgage, effectively eliminating the property tax pain point from their consideration.