{"id":2331,"date":"2016-04-15T10:44:29","date_gmt":"2016-04-15T10:44:29","guid":{"rendered":"https:\/\/www.movoto.com\/foundation\/?p=2331"},"modified":"2016-04-15T10:44:29","modified_gmt":"2016-04-15T10:44:29","slug":"birmingham-property-tax-how-does-it-compare-to-other-major-cities","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/birmingham-property-tax-how-does-it-compare-to-other-major-cities\/","title":{"rendered":"Birmingham Property Tax: How Does It Compare to Other Major Cities?"},"content":{"rendered":"

Birmingham<\/a>, AL\u00a0has been\u00a0the hidden gem of the southern United States for some time now, with savvy real estate investors jumping on the recent municipal bankruptcy news to usurp incredible properties at rock bottom prices. The result has been some incredible returns for the investors smart enough to see the opportunity and a dog whistle to other investors that Birmingham is the next mid-sized metropolitan area that is prime for restructuring.<\/p>\n

Alabama in general has some of the lowest property tax rates<\/a> in the entire United States. This is general policy among the Republican led state legislature, who pride themselves in keeping all taxes as low as possible. However, because of the unique way in which Alabama calculates its property tax rates, the local municipalities actually have much more control over their individual tax rates. This unique structure allowed Birmingham the ability to lower its property tax rate even below that of the state average in order to attract real estate investors to help shore up its bankruptcy. Let’s take a look at the way that Birmingham was able to positively manipulate its tax structure, how Birmingham property tax compares to other comparable cities around the United States,\u00a0and how you might be able to take advantage of it.<\/p>\n

How Do You\u00a0Calculate\u00a0the Birmingham Property Tax Rate?<\/b><\/p>\n

\"Birmingham<\/p>\n

Unlike many other states, Alabama does not have a fixed property tax rate that is based on a percentage of the property value. This is part of the calculation, and that is basically a statewide initiative. However, local municipalities have the ability to individually change their own millage rates, lowering the property tax in their area for their own purposes, and\u00a0Birmingham used this unique property to its advantage after its municipal bankruptcy.\u00a0In general, here is the formula for calculating property tax in Alabama<\/a>.<\/p>\n

Assessed Value X Millage Rate = Unadjusted Tax Bill<\/p>\n

As you can see, lowering the millage rate has a direct and significant effect on the unadjusted tax bill that an investor pays. Currently, the millage rate for Birmingham is 28.5, one of the lowest in the state. For a property that has an assessed home value of $140,800, for example, the property taxes owed would be only $888. This comes out to an incredibly small 0.631 percent of the assessed value of the property being owed in property tax.<\/p>\n

Alabama real estate owners pay about a quarter of the property tax of other cities in the United states, on average. Here are some direct comparisons with similar cities.<\/p>\n