Alabama vs Tennessee
Property‑Tax Comparison: Alabama vs. Tennessee
Alabama and Tennessee are neighboring states with relatively low property‑tax burdens compared with the national average. Using the most recent data from the U.S. Census Bureau, the two states can be contrasted on effective tax rates, median home values, and the resulting annual taxes for typical properties.
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 Tennessee’s is 0.55 %. The difference translates into lower annual taxes for comparable homes in Alabama.
Side‑by‑Side Metrics
| Metric (2023 ACS) | Alabama | Tennessee |
|---|---|---|
| Effective property‑tax rate | 0.38 % | 0.55 % |
| Median home value | $195,100 | $256,800 |
| Median annual property tax | $738 | $1,400 |
| Tax on a $250,000 home | $946 | $1,363 |
| Tax on a $500,000 home | $1,892 | $2,726 |
| Median household income | $62,027 | $67,097 |
Sources: According to the U.S. Census Bureau's 2023 American Community Survey (5‑year estimates).
Which State “Wins” on Property Taxes?
- Winner (lower tax rate): Alabama
- Rate difference: 0.17 % points, which is a 30.6 % lower effective rate than Tennessee’s.
- Annual tax difference on a $250k home: $1,363 – $946 = $417.
- Annual tax difference on a $500k home: $2,726 – $1,892 = $834.
The lower effective tax rate in Alabama results in consistently smaller property‑tax bills for identical property values. Because the tax amount is calculated as effective rate × assessed value, the percentage gap produces proportional dollar‑amount differences across price tiers.
Who Benefits Most From This Comparison?
| Audience | Relevance of the Comparison |
|---|---|
| Current homeowners | May see a lower ongoing tax expense if they own or are considering purchasing a home in Alabama versus Tennessee. |
| Prospective homebuyers | The lower tax rate can affect total housing costs, especially for buyers of higher‑priced homes ($250k‑$500k). |
| Retirees | Property‑tax savings can be significant for fixed‑income households; Alabama’s lower rates may help stretch retirement budgets. |
| Real‑estate investors | Lower taxes can improve net operating income and overall return on investment in Alabama properties. |
| Policy analysts | Provides a concise data point for evaluating state‑level tax policy and its impact on housing affordability. |
The comparison is most useful for individuals and professionals evaluating the ongoing cost of homeownership rather than for those focused on other tax categories (e.g., income or sales tax).
Further Reading
- Detailed information on Alabama’s property‑tax structure: Alabama property tax
- Detailed information on Tennessee’s property‑tax structure: Tennessee property tax
All figures are based on the 2023 American Community Survey 5‑year estimates published by the U.S. Census Bureau.
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.