Alabama vs Texas
Property‑Tax Comparison: Alabama vs. Texas
Intro
Both Alabama and Texas rely on property taxes to fund local services such as schools, roads, and public safety. According to the U.S. Census Bureau’s 2023 American Community Survey (5‑year estimates), Alabama’s effective property‑tax rate is substantially lower than Texas’s, while the median home value and household income are also lower in Alabama. The following side‑by‑side table presents the key metrics used in the comparison.
Side‑by‑side comparison
| Metric | Alabama | Texas |
|---|---|---|
| Effective property‑tax rate | 0.38 % | 1.58 % |
| Median home value | $195,100 | $260,400 |
| Median annual property tax | $738 | $4,111 |
| Property tax on a $250,000 home | $946 | $3,947 |
| Property tax on a $500,000 home | $1,892 | $7,893 |
| Median household income | $62,027 | $76,292 |
Sources: According to the U.S. Census Bureau’s 2023 American Community Survey (5‑year estimates).
Which state “wins” on property tax?
- Winner (lower tax rate): Alabama
- Tax‑rate difference: 1.20 percentage points, which is a 76.04 % lower effective rate than Texas.
- Annual tax difference on a $250k home: $3,001 lower in Alabama.
- Annual tax difference on a $500k home: $6,001 lower in Alabama.
Why Alabama wins: The effective property‑tax rate of 0.38 % in Alabama is roughly one‑quarter of Texas’s 1.58 % rate. Because the rate is applied to the assessed value of the property, the lower rate translates directly into lower annual tax bills across the price range shown.
Who is most affected by this comparison?
| Audience | Implications in Alabama | Implications in Texas |
|---|---|---|
| Current homeowners | Lower ongoing property‑tax expenses; potential savings of $3,000–$6,000 per year on homes worth $250k–$500k. | Higher property‑tax expenses; larger annual outlays relative to home value. |
| Prospective homebuyers | May find the lower tax burden attractive, especially when budgeting for total housing costs. | Must account for a higher tax component in the overall cost of homeownership. |
| Retirees on fixed incomes | Lower property taxes can reduce the proportion of income needed for housing costs. | Higher taxes may represent a larger share of limited retirement income. |
| Investors / rental property owners | Lower property‑tax liability can improve net operating income and cash flow. | Higher taxes increase operating expenses, affecting return calculations. |
The comparison is most relevant to homeowners, prospective buyers, retirees, and real‑estate investors who consider property‑tax costs as part of their overall financial planning.
Related resources
- Detailed information on Alabama’s property‑tax system: Alabama property tax
- Detailed information on Texas’s property‑tax system: Texas property tax
Based on the most recent ACS estimates, the figures above reflect statewide averages and medians; local rates can vary within each state.
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.