Property and Income Taxes in Wisconsin and Illinois, Explained
Property tax is usually the biggest difference between the two states, and income tax can cut the other way for high earners. Here is how each works.
Beatrice Yunck, Real Estate Consultant, Queen Bea Realty Group
Wisconsin license 98118-94 · Illinois license 475.210497 · 4 years in the area
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Wisconsin vs. Illinois property taxes
Both states tax homes every year based on value; the effective rate differs by town and county. Use the calculator to compare specific towns at your home price.
In Wisconsin, each municipality’s assessor values property, and the Department of Revenue then “equalizes” every municipality to full market value each year. To compare towns, use the effective full-value rate — the tax divided by full market value — from the Department of Revenue’s Town, Village and City Taxes report.
In Illinois, property is assessed at one-third of market value outside Cook County; Cook County assesses homes at 10%, and the state applies an equalization factor. Roughly: bill = market value × assessment level × equalizer × the local composite tax rate, minus exemptions such as the homeowner exemption. The county clerk publishes the composite rates.
Milwaukee County vs. Waukesha County property taxes
Effective property tax rates (2025 levy, collected 2026): Milwaukee County average 1.90%, Waukesha County average 0.99%. Examples — Milwaukee County: City of Milwaukee 2.08%, Wauwatosa 1.80%, Franklin 1.49%, Whitefish Bay 1.39%. Waukesha County: Waukesha 1.31%, New Berlin 1.11%, Brookfield 1.06%, Muskego 0.86%, City of Pewaukee 0.85%.
On a $500,000 home, the county averages work out to about $9,500 a year in Milwaukee County and about $4,950 in Waukesha County, before the lottery and gaming credit.
Wisconsin income tax rates
Wisconsin taxes income in brackets from 3.5% to 7.65%; most middle incomes fall in the 5.3% bracket.
Source: PolitiFact (June 2025)
Illinois income tax
Illinois taxes income at a flat 4.95%.
Source: Illinois Department of Revenue
Live in Wisconsin, work in Illinois: how taxes work
Illinois has reciprocal agreements with Iowa, Kentucky, Michigan and Wisconsin. Wisconsin residents working in Illinois file Form IL-W-5-NR with their employer so wages are taxed only by their home state.
The Wisconsin lottery and gaming credit
You qualify if you own the home and it is your primary residence on January 1 of the year the taxes are levied; rentals, vacation homes, business property and vacant land don’t qualify. If the credit is missing from your bill, apply to your municipal or county treasurer by January 31 — late claims go to the Wisconsin DOR by October 1. The amount is set each year by a statewide formula.
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