Quote:
Originally Posted by marothisu
In our situation, what we save in income tax by moving to Chicago is not much less than the property tax in our new place. However again what we're buying is not cheap - that was our decision even though we could have bought a place for half that amount or even less. In that situation if we did spend less then we would be paying less even with the higher income taxes here. Even so, the cost of housing is so much where we came from that even if we did stay with our needs, we'd probably be spending minimum of what we are here in NYC for a much worse quality place.
Case in point - I think Chicago is still attractive for people from higher COL areas especially with higher taxes like NY, parts of NJ, and CA. It may also be pretty attractive for people with similar income taxes and lower property taxes, but way higher housing costs (i.e. Boston). You have to always factor in how much less your mortgage (or rent) payment would be for something similar. If you were paying a $3000/mo mortgage for a place in one location but in Chicago you could get a similar property with a $1500/mo mortgage then even with an increase of property taxes, you still may overall save money in the move regardless of the higher property taxes.
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Your analysis is fine but there is one huge factor you are missing.
Chicago’s property taxes are hugely unstable and can swing WAY up in one year. It can be catastrophic for families. You just won’t see a sales or income tax increase that can wield so much damage.
There are people seeing their property tax going up by double in just one year. Imagine paying $10,000 and then paying $20,000 the following year, with no end in sight.
Property taxes need to be contained.