Alabama vs Arkansas
Property‑Tax Comparison: Alabama vs. Arkansas
Brief Overview
Both Alabama and Arkansas levy property taxes at rates that are below the national average. According to the U.S. Census Bureau’s 2023 American Community Survey (5‑year estimates), Alabama’s effective property‑tax rate is 0.38 %, while Arkansas’s rate is 0.57 %. The lower rate in Alabama translates into lower annual tax payments for comparable home values, which can be an important factor for current and prospective homeowners, retirees, and anyone evaluating the overall cost of owning real‑estate in the two states.
Side‑by‑Side Metrics
| Metric | Alabama | Arkansas |
|---|---|---|
| Effective property‑tax rate | 0.38 % | 0.57 % |
| Median home value (2026) | $195,100 | $175,300 |
| Median annual property tax | $738 | $1,003 |
| Property tax on a $250,000 home | $946 | $1,431 |
| Property tax on a $500,000 home | $1,892 | $2,861 |
| Median household income (2026) | $62,027 | $58,773 |
Sources: “According to the U.S. Census Bureau’s 2023 American Community Survey (5‑year estimates).”
Which State Has the Lower Tax Burden?
Winner: Alabama
Reasoning
- Effective tax rate: Alabama’s 0.38 % is 0.19 % points lower than Arkansas’s 0.57 %.
- Relative difference: The rate difference represents a 33.9 % lower effective tax rate in Alabama.
- Dollar impact: For a $250,000 home, the annual tax is $485 less in Alabama ($946 vs. $1,431). For a $500,000 home, the difference widens to $969 ($1,892 vs. $2,861).
Because the comparison is based on the effective property‑tax rate, the lower rate in Alabama results in consistently lower tax payments across the median home price and the two sample price points.
Who Might Benefit Most from This Comparison?
| Audience | Relevance of the Data |
|---|---|
| Current homeowners | Understanding the ongoing tax liability helps with budgeting and long‑term financial planning. |
| Prospective homebuyers | Lower tax rates can reduce the total cost of ownership, influencing the affordability of a purchase in each state. |
| Retirees | Many retirees are on fixed incomes; a lower property‑tax rate may improve affordability of homeownership or downsizing. |
| Real‑estate investors | Property‑tax expense directly affects cash‑flow calculations; a lower rate improves net operating income. |
| Policy analysts / researchers | The figures provide a baseline for comparing fiscal policy and its impact on household finances. |
The comparison is purely quantitative; it does not address other fiscal considerations such as local service levels, sales taxes, or income‑tax structures.
Further Reading
- Detailed information on Alabama’s property‑tax system: Alabama property tax
- Detailed information on Arkansas’s property‑tax system: Arkansas property tax
Based on the most recent ACS estimates, Alabama’s lower effective property‑tax rate yields lower annual tax payments for comparable home values, making it the state with the lower property‑tax burden among the two.
Explore More Comparisons
Discover how property taxes compare across all states in our comprehensive comparison guide.
Data Source
All figures are drawn from the U.S. Census Bureau's 2023 American Community Survey (5‑year estimates). This comprehensive dataset provides reliable, standardized property tax information across all states.