Property taxes in the U.S. vary significantly from one location to another. The Lincoln Institute of Land Policy reported that in 2023, the average effective rate on a median-valued home in major cities was 1.29%. However, several cities demand much higher rates. For many homeowners, these elevated rates make property tax breaks particularly beneficial. Nonetheless, most local governments rely on these taxes to fund schools, police, fire services, and other essential public services.
Rockford, Illinois exemplifies how high these taxes can reach. Located about 100 miles northwest of Chicago in Winnebago County, Rockford was known for fastener manufacturing in the mid-1900s. Today, it garners attention for a different reason: homeowners pay property taxes at a rate of 2.06% above market value, making it one of the highest in the nation, according to ATTOM Data Solutions‘ 2024 report. A homeowner in Rockford might pay thousands more each year than someone with a comparable home elsewhere.
What’s Driving Rockford’s High Home Premiums
Rockford’s property taxes are levied by various local bodies — including schools and townships — each setting their own rates. The county clerk’s office aggregates these levies and divides them by the total assessed property value in the county to determine the final tax rate. Property values in Winnebago County surged by 13%, according to the Rock River Current. This increase in property values, combined with eight out of eleven taxing bodies raising their rates in 2024, led to higher tax bills. Only three bodies, including the city, either maintained or lowered their rates. As a result, many homeowners are considering appealing their property taxes to alleviate the financial burden.
However, appealing your property taxes can be risky. There’s no guarantee of a reduction, and if not done correctly, your assessed value might even increase. Rockford’s median home value is $242,000, according to Illinois Policy, which is below the state median of $282,500, yet rising taxes still significantly impact homeowners. State law limits annual levy increases to 5% or the Consumer Price Index (whichever is lower), plus new construction adjustments. The Illinois Department of Revenue indicates that it still allows for a maximum 3.4% increase in 2025.
What Makes Rockford Worth Staying In
Rockford is taking steps to ease the burden for new homeowners while simultaneously increasing housing availability. The city offers a three-year property tax rebate for those who construct new single-family homes, townhomes, duplexes, triplexes, or larger buildings, provided construction begins before the end of 2025 and is completed within a year. This initiative is attracting buyers, investors, and developers, helping to stabilize neighborhoods and increase available housing.
According to the Federal Reserve Bank of St. Louis, Rockford’s Regional Price Parity was 90.067 in 2023, indicating that living costs are approximately 9.93% below the national average of 100. The cost of living essentials like milk, eggs, and potatoes is lower than average, as reported by RentCafe‘s 2025 data. Additionally, electricity bills in Rockford average $91.29 per month, significantly less than the U.S. average of $142.37, according to PowerOutage.us. These savings allow residents to allocate funds toward other needs or save more. Furthermore, Illinois exempts Social Security income from state taxation, providing older adults with additional financial relief.
