How much does moving from Illinois to Austin save on taxes?

For a household at $200,000 in gross income, dropping Illinois's 4.95 percent flat income tax saves $9,900 per year in state income tax. For a household at $400,000, savings run $19,800 per year. For a $750,000 earner, savings exceed $37,000 per year. Property tax rates are approximately comparable (Illinois effective rates run 2.2 to 2.3 percent, Texas effective rates in Travis County run 1.8 to 2.4 percent depending on taxing jurisdiction), so the property tax line is roughly a wash. The sales tax rate is slightly lower in Texas (6.25 percent base) than Illinois (6.25 percent base plus local additions, with Chicago at 10.25 percent total). The net annual tax delta for most Illinois-to-Austin movers is dominated by the income tax reset, and it compounds year over year without the overhang of a pension-funding crisis driving future rate increases.

Isn't Austin property tax really high too?

Yes, Texas property tax is high. Travis County effective rates run 1.8 to 2.4 percent of market value depending on the specific taxing jurisdictions that stack on a given address. Illinois property tax is also high: statewide effective rates run around 2.2 percent, and Cook County and the collar counties typically run higher. On a comparable home, the dollar-amount property tax difference between Chicago-area and Austin-area properties is usually small. The decisive tax difference is the elimination of state income tax, which Illinois cannot match. For a $600,000 home with a $7,500 Illinois property tax bill versus a $600,000 Austin home with a $11,000 Travis County property tax bill, the $3,500 property tax penalty is almost always far smaller than the state income tax savings for any household earning $75,000-plus.

What is the Illinois pension crisis and does it matter for my relocation decision?

Illinois has the worst-funded state pension system in the US, with an unfunded liability estimated at $140 to $200 billion across the five state retirement systems. Illinois state bonds carry the lowest credit rating of any US state, and the pension funding shortfall drives the structural case for future state income tax increases. For a current Illinois resident, this translates into real exposure: pension-driven tax hikes have been proposed repeatedly, and a graduated (progressive) income tax amendment that would have raised rates on higher earners was on the 2020 ballot and may return. Moving to Texas removes that exposure permanently. The relocation decision is not primarily about today's 4.95 percent flat rate; it is about the direction the rate is likely to move over the next 10-20 years, which is upward in Illinois and locked at 0 percent in Texas.

What is the weather trade from Chicago to Austin, honestly?

Chicago averages 70 days per year with a high below freezing. Austin averages 15 days per year with a low below freezing (daytime highs below freezing are rare). Chicago's January average high is 32 Fahrenheit. Austin's January average high is 62. Chicago has lake-effect snow, extended ice-event stretches, and genuinely dangerous subzero cold snaps. Austin has one or two hard freezes per winter (February 2021 produced a notable multi-day freeze that caused pipe failures), hot summers (100-plus days from June through September), and hail season in spring. The trade is dramatic winter relief in exchange for hot summers. Most Illinois movers consider this the single biggest quality-of-life upgrade of the move after the tax reset.

Which Austin submarket matches Chicago's North Shore?

Westlake (78746) is the closest Austin equivalent of the North Shore (Winnetka, Kenilworth, Lake Forest, Highland Park). Both are affluent, highly-ranked public school districts (Eanes ISD in Westlake, New Trier Township in Winnetka), with large lots and established trees. Austin inventory in 78746 above $2M currently shows 153 active listings averaging $5.0M. Barton Creek (78735) and Rob Roy on Lake Austin also fit this persona. If the move is from Winnetka to Westlake, expect the Austin property to typically cost 15-30 percent less for comparable square footage and lot size, and expect the public school outcome (Eanes ISD) to be comparable to New Trier. Buyers from Lake Forest and Highland Park often also look at Lakeway (78734, 78738) for lake access that approximates the Lake Michigan proximity of their origin suburb.

How does the actual move from Illinois to Texas work logistically?

Illinois has a 183-day rule for ending state tax residency. A household establishes Texas residency by moving physical presence, getting Texas driver's licenses, registering vehicles in Texas, registering to vote in Texas, filing the final Illinois part-year return, and documenting the Illinois residency termination. Key items that commonly trip Illinois movers: keep documentation of travel days inside and outside Illinois during the transition year; close Illinois bank accounts or move them to Texas branches; update doctor, dentist, and medical records to Austin providers; cancel Illinois professional licenses if applicable or transfer them (bar, CPA, medical, etc.); update beneficiary addresses on retirement accounts. Illinois has aggressive residency audits for high earners who move, so documentation discipline during the first full year is important. A tax professional with multi-state Illinois experience is worth hiring for the first year transition.

Moving from Illinois to Austin: The 2026 Relocation Playbook

The Illinois-to-Austin move is driven by three forces that compound rather than add. The 4.95 percent state income tax is the obvious one, worth $9,900 per year on a $200K household and $37,000-plus on a $750K household. The pension-funding overhang is the structural one that drives expectations about which direction Illinois rates move over the next 10-20 years, which is upward. And the climate reality of 70 freezing days per year gets reframed as a daily-life choice rather than something to be endured once the move is live. The playbook below covers the mechanics.

Who is writing this. Luke Allen, licensed Texas Realtor, TREC license 788149, representing buyers and sellers in the Austin metro and the surrounding ring counties. Multiple Illinois clients have moved through this playbook in the last 24 months. For Illinois-side listing or tax-filing matters I will refer you to vetted Chicago-area counterparts.

Why the pension overhang matters more than the current rate

Most relocation analyses treat the current state tax rate as fixed and compare it statically to the destination state. For Illinois that framing misses the biggest variable. The Illinois state retirement systems carry an unfunded liability estimated between $140 billion and $200 billion depending on actuarial method, which is the worst-funded state pension system in the country. The structural math around that liability means Illinois has consistent upward pressure on income tax rates and property taxes, which is why a graduated progressive income tax amendment landed on the 2020 ballot and may return.

Moving to Texas does not just reduce today's income tax from 4.95 percent to zero. It locks the household's income tax rate at zero under the Texas state constitution, which specifically prohibits a state income tax without a constitutional amendment and a two-thirds supermajority vote. The variance protection on the downside is real and worth weighting into the decision.

The actual tax math at common income bands

At $150,000 household gross income, Illinois state income tax runs approximately $7,000 per year. Austin property tax on a $600,000 home runs approximately $11,000 per year. Illinois property tax on a comparable $500,000 home runs approximately $10,000 per year. Net annual tax picture: $11,000 Austin property tax versus $17,000 Illinois combined (property plus income), a $6,000 annual advantage to Austin after accounting for the slightly cheaper Illinois home.

At $300,000 household gross income, Illinois state income tax runs approximately $14,800. Austin property tax on an $850,000 home runs approximately $15,500. Illinois property tax on a comparable $700,000 home runs approximately $14,500. Net annual tax picture: $15,500 Austin versus $29,300 Illinois, a $13,800 annual advantage.

At $600,000 household gross income, Illinois state income tax runs approximately $29,700. Austin property tax on a $1,400,000 home runs approximately $27,000. Illinois property tax on a comparable $1,100,000 home runs approximately $22,000. Net annual tax picture: $27,000 Austin versus $51,700 Illinois, a $24,700 annual advantage. The gap scales with income because property tax is anchored to home value while income tax is anchored to income.

At any income band above $100K, the Texas property-tax penalty on a comparable home is far smaller than the Illinois income-tax savings. The crossover does not exist in practice.

The residency termination mechanics

Illinois uses a 183-day rule to determine state tax residency. A household establishing Texas residency needs to shift physical presence, change licenses and registrations, and document the Illinois exit. The following sequence has worked for every Illinois client who has moved through this playbook:

Lock down the move date and track presence from that day forward. Keep a travel log for the full transition calendar year. Illinois Department of Revenue audits part-year filers aggressively on high-income relocations, so documentation discipline matters. Credit card statements, cell phone location data, and travel receipts all serve as evidence.
Change physical address to Texas before claiming Texas residency. A rental lease or home purchase close date in Austin is the primary anchor. Illinois courts have treated the physical move as the controlling fact.
Convert driver's license and vehicle registration to Texas within 90 days of the move. This is both the Texas legal requirement and important documentation for Illinois exit.
Register to vote in Travis County. Illinois voter rolls flag Illinois registration as a residency factor on audits, so completing this step clearly matters.
Update bank accounts, credit card addresses, retirement account beneficiary addresses, and insurance policies to the Texas address. Not just mailing address, but account-of-record address.
Transfer medical records to Austin providers and schedule the first appointment with an Austin-area doctor and dentist. Medical records in Illinois versus Texas are a surprisingly common audit factor.
File the final Illinois part-year return and the first full-year Texas return. Hire a tax professional with multi-state Illinois experience for the transition year.
Keep documentation for 7 years after the transition year. Illinois has a longer audit lookback than most states and specifically targets high-income relocations to Texas, Florida, and Tennessee.

The Chicago-area selling side of the move

I do not represent Illinois sellers directly, but a few patterns from clients who have run both sides of the move are worth noting. Chicago-area North Shore and Western Suburbs listings in 2026 are moving at longer days-on-market than during the 2021-2022 peak but still finding buyers at reasonable price points. Pricing to the current market rather than to pre-correction peaks is important. The transition timing that has worked best for most clients has been listing the Illinois home in late spring, closing by late summer, and completing the Austin purchase before the Illinois school year starts, which allows the family to transition kids into Austin ISD or Eanes ISD in the normal enrollment window rather than mid-year.

Capital gains exposure on the Illinois sale: the IRC Section 121 primary residence exclusion still applies ($250K single, $500K married-filing-joint), and selling before the move allows the household to take the exclusion as Illinois residents without triggering the Illinois departing-resident tax, which is a non-issue in Illinois because Illinois does not have a departing-resident exit tax.

Bottom line

Illinois to Austin is one of the cleanest state-to-state relocation cases in the current real estate market. Tax math is unambiguously in Austin's favor at any income band above the median. Climate delta is dramatic. Pension-crisis exposure drops to zero. The variance protection from the Texas constitutional income tax prohibition is a durable asset for a long-hold family. The five persona matches above cover the primary Illinois origin profiles, and the residency termination mechanics are the mechanical path from one to the other.

Reach out if the move is on your 12-to-24-month horizon. I will walk through the specific Austin submarket match for your Illinois origin, pull live inventory in your price band, and connect you with a Chicago-area agent and tax professional for the Illinois-side execution. The Austin side I handle directly.

Illinois to Austin, mapped

The pension-crisis overhang is the real reason Illinois outbound migration keeps accelerating

Illinois vs Texas, the numbers

Where Illinois movers land

Why the pension overhang matters more than the current rate

The actual tax math at common income bands

The residency termination mechanics

The Chicago-area selling side of the move

Bottom line

Map your Illinois exit to Austin