Calculating Baldwin County Property Tax
GENERAL FORMULA & EXAMPLE
Fair Classification Assessed Tax Gross Homestead Net
Market Value X Assessment Ratio (%)* = Value X Levy (Millage Rate)** = Tax –Homestead Exemption = Tax
$50,000 X 10% = $5,000 X .0275 = $137.50 – $45.00 = $93.50
(The Formula Above Does Not Apply To Farm Or Forest Lands Receiving Benefit Of “Current Use” Values).
*Alabama Legislature Has Established Property Assessment Ratios As Follows:
Class I —– Utilities 30%
Class II —– All Other Property 20% – including 2nd home and investment properties
Class III —– Farm, Forest, and Owner Occupied Residential Property 10%
Class IV —– Motor Vehicles 15%
The above information is deemed reliable but subject to change!
Thinking about moving to coastal Alabama? It’s a great choice. The weather is great, the people are friendly, and the surroundings are, in my opinion, the most beautiful in the world. With all this to offer, you’d think property taxes would be pricey, but in fact, there is only one state with lower taxes, and that’s Hawaii.
The mean effective property tax rate on owner occupied housing is 0.43% in Alabama. In Baldwin County, where Gulf Shores and Orange Beach are located, property taxes are calculated using a general formula. It does not apply to farm or forest lands receiving benefit of current use values.
Market Value x Assessment Rate* = Value x Levy (Millage Rate)** = Tax – Homestead Exemption = Tax
*The assessment rate for owner occupied housing is 10%
*The assessment rate for non-owner occupied housing is 20%
**The millage rate for the city of Gulf Shores is currently 33 mills.
**The millage rate for the city of Orange Beach is currently 32 mills.
Each “mill” is equivalent to one-tenth of a cent. For Gulf Shores, the levy would be .033, and for Orange Beach, .032.
Let’s take a look at a couple of examples. If you own a $300,000 home or condo in Gulf Shores, and you reside in that home, your taxes would be:
$300,000 x .10 = $30,000 x .033 = $990 – $45 = $945 Total Tax
If you’re in beautiful Orange Beach, and you reside in your home (and why wouldn’t you?), your taxes would be:
$300,000 x .10 = $30,000 x .032 = $960 – $45 = $915 Total Tax
If you purchased the same $300,000 property in Gulf Shores as a second home, for your personal use or as investment property to be rented, your taxes would be:
$300,000 x .20 = $60,000 x .033 = $1980 Total Tax
In Orange Beach, your taxes would be:
$300,000 x .20 = $60,000 x .032 = $1920 Total Tax
See what I mean? So, why on earth are you still just thinking about it? Alabama has an abundance of things to offer, and Gulf Shores and Orange Beach are at the top of the list.
Here in Baldwin County, our property taxes are based on the millage system. A mill is equivalent to one-tenth of a cent. In Magnolia Springs and Foley, taxes are levied at 33 mills or .033 of the assessed value of your home. If you live in your home, your assessed value is 10% of the market value, plus there is a homestead exemption of $45.00. If you own a second home or investment property here, the assessed value is 20% of the market value.
Let’s look at an example. If you own a $200,000 home in Foley or Magnolia Springs that is your principle residence, your property taxes would be:
Market Value x Assessment Rate = Value x Levy = Tax – Homestead Exemption
$200,000 x .10 = $20,000 x .033 = $660 – $45 = $615 per year
If you’re buying a second home or investment property, the property taxes for a $200,000 home would be:
$200,000 x .20 = $40,000 x .033 = $1,320 per year
So, the state motto is right – Alabama IS beautiful, in more ways than one. Now is a great time to buy, and we can help you find the home of your dreams in Foley or Magnolia Springs. Remember, you can live here, too.