As one searches for the right home, there are many elements to consider, including the different costs involved in the purchase. If you’re deciding which type of home is best for you, make sure to compare the property tax of a condo vs. house.
The Property Tax of a Condo Vs. House
Some people assume that the property tax is lower for condos since this property type tends to be smaller than single-family homes. However, this is not always the case.
Property tax is determined by both a home’s assessed value and the mill levy or local tax rate for your area.
Multiple factors impact a home’s assessed value, including square footage, number of bedrooms, updates and other internal characteristics. However, indirect characteristics, such as neighborhood and current state of the market also affect that number. An assessor is the one responsible for evaluating the home’s value based on all of these factors.
If you are looking for an updated luxury condo in a popular Chicago neighborhood, the assessed value could be higher than that of a larger single-family home outside of the city.
The State of Illinois is known for its steep property tax rates. Cook County is no different, with an average effective rate of 2.1%, nearly double the national average.
So when comparing property tax of a condo vs. house, the answer isn’t black and white. A buyer must investigate the value of their property and the tax rate in the area to understand the expected property tax rates of potential properties.
Other Costs to Consider
Beyond property taxes and sale price, there are other costs that a buyer should keep in mind when comparing condos vs. single-family homes.
Insurance and homeowner association fees are two significant expenses that one needs to determine before closing on a property.
Homeowner insurance is typically lower for a condo since the HOA shoulders some of the coverage. The HOA is often responsible for covering the roof and exterior features of the home.
However, to be members of homeowners associations, condo owners are expected to pay monthly or annual dues to their HOA.
Some single-family homeowners also belong to HOAs, which means the owner will also be responsible for member dues. However, luxury condos tend to offer more amenities than single-family home communities, which can bump up those costs.
Although belonging to an HOA comes with membership fees, this type of membership can save a homeowner money. If you are considering a property that has an HOA, determine what expenses they cover. It is common for condo associations to pay for maintaining the exterior part of the property, including landscaping and snow removal.
As you begin weighing the property tax of a condo vs. house and wrapping your mind around other costs, it may seem overwhelming. Let the Luxury Living Chicago Realty team help simplify this process and find you the perfect home. Connect with one of our experienced team members so we can help you with this journey!
For more pros and cons of buying a condo vs. a house in Chicago, follow the link below.