Why Are Residential Tax Bills Exploding While Commercial Properties See Relief?

Property taxes rarely make front-page news, but across Illinois, they’ve become impossible to ignore. Homeowners opening their latest tax bills have been met with steep increases, sometimes by double digits, without any dramatic rise in home value or local services to justify it. At the same time, commercial property owners, particularly in office and retail sectors, have seen successful appeals slash their assessments, leading to meaningful reductions in what they owe.

Behind these opposing trends is a structural shift in how tax burdens are being divided, and it’s turning residential taxpayers into financial backstops for struggling commercial real estate.

When One Sector Stumbles, the Other Pays

Illinois uses a levy-based tax system. Local taxing bodies, school districts, municipalities, libraries, fire departments, decide how much money they need each year, and that amount must be collected from property owners. What changes year to year isn’t how much needs to be raised, but who is responsible for paying it.

In stronger markets, commercial real estate contributes a healthy share of the total tax base. But when large office buildings, shopping centers, or industrial sites see declining values, those properties are reassessed lower, and in many cases, their owners successfully appeal for even further reductions. That lost tax contribution doesn’t disappear; it’s spread across the rest of the property base, which in most communities means residential homes.

This shift has been especially visible in the wake of the post-2020 downturn in urban and suburban office demand. Vacancy rates are still elevated, remote work has shrunk footprints, and retail continues to evolve in ways that leave many properties underperforming. As a result, commercial assessments have been falling, and appeals boards have been under pressure to acknowledge those declines.

The result: residential owners, particularly those in stable neighborhoods where values have held firm or risen, are now absorbing a growing share of the tax burden.

Why Homeowners Feel the Pinch

Unlike large commercial entities that often employ attorneys or consultants to challenge assessments, most residential owners accept their tax bills without question. Many don't realize that the increase in their bill may have more to do with commercial reassessments than any change in their own home’s value.

What’s particularly frustrating is how opaque the system can feel. A homeowner might see a $2,000 increase in their annual bill and assume their municipality is spending more. In reality, the local budget may be flat—but the shrinking contributions from commercial properties are forcing everyone else to pick up the slack.

In some towns, this has led to an erosion of trust between residents and local government, especially in communities that pride themselves on transparency and fiscal discipline. The problem isn’t overspending, it’s imbalance.

The Role of Appeals—and Who Uses Them

Commercial property owners know how to work the system. Armed with appraisals, vacancy reports, and legal teams, they approach tax appeals with strategy and scale. Their ability to win reductions can save millions across a portfolio.

Homeowners, on the other hand, often don't appeal at all. Those who do may file quickly online without supporting evidence or fail to meet deadlines. The disparity in resources between the two groups creates a one-sided system that continues to shift responsibility toward individual owners.

Appeals aren’t inherently unfair; they exist to correct errors and reflect true market conditions. But when only one segment of the market uses them effectively, the tax burden stops being fairly distributed.

What Can Be Done

1. Make the Appeal Process More Accessible

Counties across Illinois should make residential appeals more user-friendly. That includes clearer instructions, better tools for comparing properties, and more transparency about how valuations are calculated.

2. Reevaluate Assessment Practices for Commercial Properties

Assessment offices are under pressure to reflect market conditions, but they also need to balance short-term downturns with long-term trends. A single bad year shouldn't become a permanent tax cut for a downtown tower, especially if the property still holds significant redevelopment potential.

3. Watch for Policy Reform

Illinois lawmakers continue to debate long-term solutions to the state's heavy reliance on property taxes. Whether through changes to school funding, diversification of local revenue, or increased state support for municipalities, broader reform will be needed to stabilize the burden for homeowners.

4. Stay Engaged Locally

Homeowners’ best defense is local awareness. Property owners should be reviewing their assessments, attending budget meetings, and understanding where tax dollars are going. Collective pressure on local boards can push for fairer practices and greater oversight of commercial appeals.

A Shifting Balance

Illinois property taxes aren’t rising because of a single policy or one bad year. They’re rising because the foundation beneath them is shifting. As commercial property values decline, whether temporarily or permanently, residential property owners are being left to cover more of the cost.

That shift may be quiet, but it isn’t small. It’s reshaping how schools are funded, how neighborhoods invest in themselves, and how affordable it is to remain a homeowner in stable, middle-class communities across the state.

Knowing what’s behind the numbers is the first step toward holding the system accountable. For those who care about the health of their communities, it’s not just a financial issue, it’s a civic one.

Need help reviewing your property assessment or planning an appeal? Reach out to our team for support. We work with homeowners, property managers, and investors across Illinois to promote fair, transparent tax practices that protect long-term investment in our neighborhoods.

For more information, feel free to reach out to us at 630-778-1800 or info@suburbanrealestate.com.