Alabama pays the lowest property taxes in the nation

Alabama pays the lowest property taxes in the nation

When it comes to taxes, Alabama is all over the map. The Yellowhammer State leads the United States in local sales tax, but a big driver of that fact is the state’s nation-low property tax rate.

RELATED: Alabama has the highest local sales tax in the nation

The average Alabamian paid just $632 in property taxes in 2020, according to a recent report from the Public Affairs Research Council of Alabama. That’s by far the the lowest in the nation, and just over a third of the national rate.

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In general, states in the Northeast pay the most in property taxes, with residents in Washington, D.C., paying the most. D.C. property taxes per capita were more than $4,200 in 2020, or nearly 7 times higher than Alabama’s rate.

Many states in the Southeast join Alabama with relatively low property tax rates – nine of the bottom 10 states for property taxes are in the South, depending on your definition of the region.

But none of them come close to Alabama. The state with the second lowest property tax rate in 2020 was Arkansas, with a per capita rate of nearly $800. That’s $166 more than in Alabama.

And if Alabama land and property owners are happy paying the lowest property taxes in the nation, there’s some good news – it’s not likely to change any time soon.

Alabama property tax rates on things like homes, farmland and timberland are protected by the state constitution, making them very difficult to raise, according to PARCA. So local governments are forced to turn to other means to raise money. That means higher sales taxes, including taxing groceries – Alabama is one of just three states, including Mississippi and South Dakota, that still does that.

Another way local governments in Alabama get around low property taxes? Traffic enforcement and speed traps. You can read all about that here.

Still, Alabama remains a low-tax state. According to PARCA, the state ranked 50th out of 51 states and Washington D.C. in all taxes combined per capita in 2020, ahead of only neighboring Tennessee.

Do you have an idea for a data story about Alabama? Or questions about Alabama that data may be able to answer? Email Ramsey Archibald at [email protected], and follow him on Twitter @RamseyArchibald. Read more Alabama data stories here.