---
title: "Illinois vs Indiana Property Taxes: What Chicago Homebuyers Actually Save | Homes219"
url: https://homes219.com/blog/illinois-vs-indiana-property-taxes
description: "Thinking about moving from Chicago to Northwest Indiana? Here's the real breakdown of what families save on property taxes — with actual numbers from Crown Point, St. John, Schererville, and more."
lang: en
---

📍 Relocation Guide · Northwest Indiana

# Illinois vs Indiana Property Taxes: What Chicago Homebuyers Actually Save

By Nicole Hanson · May 21, 2026 · 6 min read

📞 Call 219-641-3502: +12196413502

Contact Us: https://homes219.com/contact

Every week, I talk to families sitting in a Chicago suburb — great neighborhood, good schools — staring at a property tax bill that feels like a second mortgage. They already know Indiana is cheaper. What they don't know is _how much_ cheaper. Let me give you the real numbers.

I've been selling homes in Northwest Indiana for over 16 years. My team at Homes219 has helped hundreds of families make the move from Illinois to Lake and Porter County. The number one question I get, without fail, is some version of: **"What am I actually going to save on taxes?"**

So let's get into it — no fluff, no vague percentages. Just real comparisons between the towns people are leaving and the towns they're moving into.

## The Fundamental Difference: Indiana Has a Tax Cap. Illinois Doesn't.

Here's the single most important thing to understand. Indiana's state constitution caps residential property taxes at **1% of a home's gross assessed value**. That's the ceiling. On a $400,000 home in Indiana, you cannot legally pay more than $4,000 a year in property taxes — and most people pay considerably less once you factor in the Homestead Exemption.

Illinois has no such cap. Cook County's effective property tax rate regularly runs above 2%, and in many south and southwest suburbs — Tinley Park, Orland Park, Homer Glen — you'll see effective rates pushing 2.5% to 3% on some properties. That same $400,000 home could cost you $10,000 to $12,000 a year in taxes.

## Side-by-Side: Real Numbers on a $400,000 Home

| Location | Est. Annual Tax | Monthly Cost | vs. Crown Point |
| --- | --- | --- | --- |
| Tinley Park, IL | $9,800 – $11,200 | $817 – $933/mo | +$6,500/yr more |
| Orland Park, IL | $9,200 – $10,800 | $767 – $900/mo | +$6,000/yr more |
| Homer Glen, IL | $8,800 – $10,400 | $733 – $867/mo | +$5,600/yr more |
| Frankfort, IL | $9,000 – $10,200 | $750 – $850/mo | +$5,800/yr more |
| **Crown Point, IN** | $3,200 – $4,000 | $267 – $333/mo | Baseline |
| **St. John, IN** | $3,400 – $4,200 | $283 – $350/mo | Similar savings |
| **Schererville, IN** | $3,000 – $3,800 | $250 – $317/mo | Similar savings |
| **Dyer, IN** | $2,800 – $3,600 | $233 – $300/mo | Best savings |

These are estimates based on current assessed values and local tax rates. But the pattern holds across thousands of transactions: **Northwest Indiana families are keeping $500 to $700 more per month** compared to their counterparts just across the state line.

What That Savings Looks Like Over Time

Based on an average savings of $6,500/year after moving to Northwest Indiana.

$6,500 Year 1

$32,500 5 Years

$65,000 10 Years

## Don't Forget the Homestead Exemption

Indiana's 1% cap is great on its own. The Homestead Exemption makes it even better. If you're buying as your primary residence, you can file for a deduction that reduces your taxable assessed value by $48,000 — plus a supplemental deduction worth up to 35% of the remaining value.

In plain terms: most homeowners in Lake County end up paying notably below the 1% cap after filing. It's one of the first things my team walks new buyers through at closing.

> "We were paying $11,400 a year in property taxes in Orland Park. Our first tax bill in Crown Point was $3,700. We literally cried."
>
> — Recent Homes219 client, relocated from Orland Park to Crown Point, IN

## What About Income Taxes?

Property taxes get most of the attention, but income taxes matter too. Indiana taxes individual income at a flat **3.05%**. Illinois comes in at a flat **4.95%**. On a $100,000 salary, that's nearly $2,000 more per year staying in Illinois — before county and municipal taxes.

One thing that trips people up: Illinois and Indiana do **not** have a tax reciprocity agreement. If you live in Indiana and work in Illinois, you'll file in both states — but Indiana gives you a credit for taxes paid to Illinois, so you won't be double taxed. Your CPA handles this routinely, and the net result still strongly favors Indiana.

## The Bottom Line: More Home, Less Money Out the Door

Here's what surprises people who haven't spent time looking at NWI listings: the homes are bigger and newer. For $400,000 in Tinley Park, you're likely looking at 2,000–2,400 square feet from the '80s or '90s. For $400,000 in Crown Point or St. John, you're looking at 2,800–3,400 square feet, newer construction, a larger lot, and a three-car garage is practically standard.

Pair that with $500–$700 less per month in taxes, and the financial case for making the move is very hard to argue against.

## See What Your Budget Gets You in NW Indiana

No pressure. Just an honest conversation about your options and what your Illinois equity can do over here.

Talk to Nicole's Team (https://homes219.com/contact)

## Frequently Asked Questions

Are property taxes lower in Indiana than Illinois?

Yes — significantly. Indiana caps residential taxes at 1% of assessed value. Cook County averages over 2%, and many south suburbs run even higher. Indiana homeowners typically pay 40–60% less on a comparable home.

How much can a family save moving from Chicago suburbs to Northwest Indiana?

Most families save $5,000 to $12,000 per year on property taxes alone. Add income tax savings and the home-size difference, and total annual savings often exceed $15,000.

What is Indiana's Homestead Exemption?

A deduction for primary-residence owners that reduces taxable assessed value by $48,000, plus a supplemental deduction up to 35% of the remaining value. Combined with the 1% cap, most Crown Point homeowners pay well under $4,000/year on a $400K home.

Do I pay taxes in both states if I work in Chicago but live in Indiana?

You'll file in both states, but Indiana credits the taxes you paid to Illinois. You won't pay twice, and the net result still strongly favors Indiana for most earners.

Which Northwest Indiana towns have the lowest property taxes?

Dyer, Schererville, Crown Point, and St. John consistently offer the best combination of low taxes, strong schools, and newer homes for families relocating from Illinois.

Nicole Hanson

Nicole is the team lead at Homes219 | Nicole Hanson Realty LLC — a top-5 Northwest Indiana real estate team with 16+ years helping buyers and sellers across Lake and Porter Counties. Her team of 15 agents specializes in Chicago-to-Indiana relocations.
Meet the full team → (https://homes219.com/about)