With one of the hottest housing markets in the nation, Nashville continues to attract new residents from across the country in 2021, particularly those migrating from some of the largest cities including New York, Los Angeles, and Chicago. In our recent blog series, we explored some of the key similarities and differences between Los Angeles and Nashville, and now we're turning our attention to the third-most populous city in the United States — Chicago! If you're thinking about moving from Chicago to Nashville, here are a few factors you might want to consider before packing your bags.
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GENERAL POPULATION STATISTICS FOR CHICAGO V. NASHVILLE (from censusreporter.org):
Chicago, IL
- Population: 2,693,959
- Square miles: 227.4 (11,848.4 people per square mile)
- Median age: 35.2 (66% of the population in Chicago is between the ages of 18-64)
- Per capita income: $40,277
- Median household income: $61,811
- Median commute time: 35.3 minutes
- Median value of owner-occupied housing units: $275,000
Nashville-Davidson--Murfreesboro--Franklin, TN Metro Area
- Population: 1,933,860
- Square miles: 5,689.4 (339.9 people per square mile)
- Median age: 36.7 (64% of the population in Los Angeles County is between the ages of 18-64)
- Per capita income: $37,696
- Median household income: $70,262
- Median commute time: 28.5 minutes
- Median value of owner-occupied housing units: $285,100
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OVERALL COST OF LIVING IN CHICAGO V. NASHVILLE:
According to salary.com, the cost of living in Chicago is approximately 15% higher than the national average, with prices up approximately 0.8% in 2021. One key factor in a higher cost of living is that Chicago is considered one of the worst cities in the U.S. for driving, which results in increased gas and auto expenses. Comparatively, the cost of living in Nashville is 4.8% lower than the national average cost of living, although prices have increased by approximately 1.3% in 2021.
On average, the cost of living in Nashville is approximately 19.8% lower than the cost of living in Chicago.
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SALARY
A person earning an annual salary of $60,000 in Chicago would need to earn an annual salary of approximately $49,659 in Nashville to maintain a similar standard of living, according to salary.com. Employers in Nashville typically pay approximately 12.4% less than employers in Chicago for comparable jobs, so a job that typically earns $60,000 per year in Chicago will earn approximately $52,560 per year at a comparable company in Nashville.
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INCOME AND SALES TAX
Illinois has a flat income tax that features a 4.95% rate, which means that no matter how much money you make, the income tax rate remains the same. However, sales taxes in Illinois are among the highest in the nation according to smartasset.com, with Chicago's general merchandise sales tax rate coming in around 10.25%. Vehicles, food, and drugs are also subject to their own tax rates in the state of Illinois.
By comparison, Tennessee does not have an income tax on wages, although the state does have a 1% tax on income earned from interest and dividends. However, sales tax rates in Tennessee are also among the highest in the nation, with rates ranging from 8.5% or 9.75% depending on where you live. In Nashville, the combined state and county sales tax rate is currently 9.25%.
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PROPERTY TAX
One significant difference in the cost of living in Chicago versus the cost of living in Tennessee is the difference in property taxes. Tennessee has some of the lowest property tax rates in the country, whereas Illinois has some of the highest property tax rates in the country.
According to tax-rates.org, Cook County where Chicago is located has a 1.38% average effective property tax rate. There are nearly 8,500 different authorities that can levy property taxes in Illinois -- more than any other state -- and Illinois is one of 13 states with an estate tax, which requires estates worth more than $4 million to file an Illinois estate tax return and face tax rates up to 16%.
On average, the median property tax rate in Illinois is 1.73% of a home's value, compared to a median property tax rate of 0.68% in Tennessee. The national average property tax rate is approximately 1.07%.
The cost of buying a home is relatively inexpensive in both cities, with the median home value around $293,626 in Chicago versus a median home value of $340,329 in Nashville in 2021 (Zillow.com).
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Still on the fence about moving from Chicago to Nashville? Take a look at our top 7 reasons you'll fall in love with Nashville and stay tuned for our next post breaking down some differences and similarities in what each city has to offer in education, healthcare, entertainment, and more!