Alabama vs Minnesota
Property‑Tax Comparison: Alabama vs. Minnesota
Alabama and Minnesota have markedly different property‑tax environments. 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 Minnesota’s is 1.04 %. The disparity influences the amount homeowners pay each year, especially for homes valued at the median price in each state.
Side‑by‑side metrics
| Metric (2023 ACS) | Alabama | Minnesota |
|---|---|---|
| Effective property‑tax rate | 0.38 % | 1.04 % |
| Median home value | $195,100 | $305,500 |
| Median annual property tax | $738 | $3,184 |
| Property tax on a $250,000 home | $946 | $2,606 |
| Property tax on a $500,000 home | $1,892 | $5,211 |
| Median household income | $62,027 | $87,556 |
Sources: “According to the U.S. Census Bureau's 2023 American Community Survey (5‑year estimates).”
Which state has the lower tax burden?
- Winner (lower effective tax rate): Alabama
- Tax‑rate difference: 0.66 % points (Alabama’s rate is 63.70 % lower than Minnesota’s).
- Annual tax difference on a $250,000 home: $2,606 – $946 = $1,660.
- Annual tax difference on a $500,000 home: $5,211 – $1,892 = $3,319.
Based on the lower effective property‑tax rate, Alabama imposes a smaller yearly tax liability on comparable home values than Minnesota. The difference persists across the $250 k and $500 k price points, reflecting the underlying rate gap rather than variations in median home values.
Who is likely to benefit from this comparison?
| Audience | Relevance of Alabama’s lower rate | Relevance of Minnesota’s higher rate |
|---|---|---|
| Current homeowners | May experience lower annual out‑of‑pocket costs for property taxes, especially if the home value is near or above the median. | Higher tax bills may be offset by higher median incomes and potentially higher public services. |
| Prospective homebuyers | Lower tax burden can improve affordability when budgeting for total housing costs. | Buyers may need to factor a larger tax component into monthly housing expenses. |
| Retirees | Reduced property‑tax payments can help stretch fixed incomes, particularly in states with lower cost‑of‑living indices. | Higher taxes could be offset by other state benefits (e.g., health‑care programs) but increase overall cost of living. |
| Investors / landlords | Lower property taxes can improve net operating income on rental properties. | Higher taxes reduce cash flow unless offset by higher rents or other revenue streams. |
The comparison is most useful for individuals evaluating property‑tax costs as part of their overall housing budget, including homeowners, prospective buyers, retirees, and real‑estate investors.
Further reading
- Detailed information on Alabama’s property‑tax structure: Alabama property tax
- Detailed information on Minnesota’s property‑tax structure: Minnesota property tax
All figures are drawn from the most recent ACS estimates available at the time of writing.
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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.