North Carolina’s effective property tax rate on owner-occupied housing is 0.66 percent against Illinois’ 1.88 percent, on the Tax Foundation’s 2026 state figures, so the same house costs roughly a third as much to carry here in property tax. The catch runs the other way on income: Illinois does not tax your pension, IRA withdrawals or Social Security, and North Carolina taxes the first two at a flat 3.99 percent.
We hear this from buyers leaving the Chicago collar counties most often, and from downstate sellers who are tired of a bill that keeps climbing on a house that has not. The property tax part of the comparison is as good as you have been told. The retirement income part is where budgets go wrong.
Here is the whole picture, with the source and date on each number, so you can run your own two houses against each other rather than trusting a headline.
What the two property tax bills look like
Illinois and North Carolina both run property tax locally. The Illinois Department of Revenue says plainly on its own site that it does not administer property tax and that the tax is managed by local governments including cities, counties and taxing districts. That is the same in principle here, but not in practice, because of how many taxing bodies you are used to seeing on one bill.
In North Carolina your bill is short. The county rate, plus a municipal rate if you are inside town limits, plus a fire or EMS district rate on some parcels. Schools are funded out of the county budget rather than billed to you as a separate district line, which is the single biggest structural difference from an Illinois bill.
- Effective property tax rate on owner-occupied housing: North Carolina 0.66 percent, Illinois 1.88 percent Tax Foundation, 2026 state tax pages, read October 27, 2026
- Individual income tax: North Carolina 3.99 percent flat, Illinois 4.95 percent flat Tax Foundation, 2026 state tax pages, read October 27, 2026
- Sales tax: North Carolina 4.75 percent state and 6.99 percent average combined, Illinois 6.25 percent state and 8.96 percent average combined Tax Foundation, 2026 state tax pages, read October 27, 2026
- New Hanover County 30.6 cents per $100, with the City of Wilmington adding 33.15 cents for a combined 63.75 cents New Hanover County fiscal 2026-2027 rates, reported by Port City Daily, July 10, 2026
- Brunswick County 34.2 cents per $100 for tax year 2026; Pender County 73.75 cents plus a countywide EMS rate of 9.25 cents Brunswick County tax rates table, tax year 2026; Pender County 2026 tax rate schedule
- New Hanover County median sale price $464,000 Our New Hanover County market update, three months ending September 2026
- On that $464,000: about $8,723 a year at Illinois’ effective rate, about $3,062 at North Carolina’s, and about $2,958 at the actual combined Wilmington city rate Our arithmetic on the rates above
- 30-year fixed average 7.32 percent Freddie Mac Primary Mortgage Market Survey, week ending October 22, 2026
Run your own house through it. At Illinois’ 1.88 percent effective rate, a $400,000 house carries roughly $7,520 a year. The same $400,000 here carries about $2,640 at the state effective rate, $2,550 inside the Wilmington city limits at the combined 63.75-cent rate, and about $1,368 in Brunswick County at 34.2 cents.
That Brunswick number is not a typo, and it is why so many Illinois buyers end up in Leland. It is also why the county you choose matters more than most arriving buyers expect. Pender County’s 73.75 cents plus 9.25 cents of EMS is more than double Brunswick’s 34.2, so a Hampstead house and a Leland house at the same price do not carry the same bill. Our New Hanover County market update tracks the prices those rates get applied to.
The part that surprises Illinois retirees
Illinois is one of the most generous states in the country on retirement income. The Department of Revenue’s own guidance, in Publication 120 and the current IL-1040 instructions, says Illinois does not tax the federally taxed portion of income from qualified employee benefit plans including 401(k)s, from an IRA or self-employed retirement plan, from government and military pensions, from railroad retirement, or the federally taxed portion of Social Security. You subtract it on line 5 of the return.
North Carolina does not work that way. Income is taxed at a flat 3.99 percent for taxable years after 2025. Social Security comes out effectively untaxed here, because the federally taxable portion is deducted back out on the state return, but pension and IRA withdrawals are taxed unless you are a vested government retiree covered by the Bailey settlement.
Put a number on it. A retired couple drawing $90,000 of taxable income from an IRA pays nothing on it in Illinois and about $3,591 a year in North Carolina. Against the property tax saving on a $400,000 house, roughly $4,880 a year, you are still ahead, but by much less than the property tax headline suggested. If your retirement draw is larger and your house is smaller, the math can flip.
How the base is set, and why that matters here
North Carolina appraises property at 100 percent of market value, and counties reappraise on their own cycles rather than nudging values every year. New Hanover County’s current values took effect January 1, 2025. Brunswick County’s next revaluation takes effect January 1, 2027. Pender County’s 2026 reappraisal was deferred for a year by Senate Bill 889, so the county built its fiscal 2026-2027 budget on 2025 valuations.
The practical consequence for anyone moving here from Illinois is that your base can reset in one step rather than drifting. If you buy in Brunswick County in the next year, expect the assessed value to move on January 1, 2027, and ask your agent to show you what the commissioners did at the last revaluation rather than assuming the rate will fall to offset it.
Two honest cautions. First, property tax relief for older owners is narrow in North Carolina, narrower than the homestead exemptions you are used to in Illinois, so an arriving retiree should assume they will not qualify rather than budgeting for a break. Second, the saving lands on a different house than the one you are selling. A Chicago-area seller moving to the coast is usually also buying coastal insurance, and wind, hail and flood premiums here can take back a meaningful share of the property tax saving. Get a bound insurance quote during due diligence rather than a ballpark, and read our line-by-line Wilmington cost of living breakdown before you set a budget. If you want the same comparison against another state, we have run it for Pennsylvania and for Massachusetts.
Related questions people also ask
Are property taxes really lower in North Carolina than Illinois?
Yes, and by a wide margin on the same house value. The Tax Foundation’s 2026 figures put the effective property tax rate on owner-occupied housing at 0.66 percent in North Carolina against 1.88 percent in Illinois, which is close to a third of the Illinois rate. Your actual bill depends on which county and which town you land in, because North Carolina rates are set locally and vary a lot within an hour’s drive. Ask for the combined rate on the specific parcel rather than relying on a state average.
Does North Carolina tax my pension if I move from Illinois?
Generally yes. North Carolina taxes income at a flat 3.99 percent for taxable years after 2025, and pension and IRA withdrawals are included unless you are a vested government retiree covered by the state’s Bailey settlement. Social Security is effectively untaxed in North Carolina because the federally taxable portion is deducted back out on the state return. Illinois by contrast exempts the federally taxed portion of qualified retirement plan income, IRAs, government pensions and Social Security under its Department of Revenue’s own guidance, so this is the line item to model before you move.
Which Wilmington-area county has the lowest property tax?
Of the three counties we serve, Brunswick County is the lowest, at 34.2 cents per $100 of value for tax year 2026, which is why Leland and the Brunswick beach towns draw so many relocating buyers. New Hanover County is 30.6 cents at the county level, but the City of Wilmington adds 33.15 cents inside the city limits for a combined 63.75 cents. Pender County is the highest of the three at 73.75 cents plus a countywide EMS rate. Remember that a lower rate on a more expensive house can still produce a larger bill, so compare dollars rather than cents.
Before you commit to a county, have someone build the real side-by-side: your current Illinois bill and retirement income against the actual combined rate, insurance quote and income tax on the specific house you would buy here. We put that on one page for relocating buyers, and it changes which town people choose more often than it changes whether they move. Send us your numbers and the areas you are considering and we will run it with you.
Sources: Tax Foundation 2026 Illinois and North Carolina state tax pages, read October 27, 2026; Illinois Department of Revenue property tax page and Publication 120, Retirement Income, with the current IL-1040 and Schedule M instructions; New Hanover County fiscal 2026-2027 rates reported by Port City Daily, July 10, 2026; Brunswick County tax rates table, tax year 2026; Pender County 2026 tax rate schedule; Senate Bill 889 deferral of the 2026 Pender County reappraisal; our New Hanover County market update, three months ending September 2026; Freddie Mac Primary Mortgage Market Survey, week ending October 22, 2026.
