[Ode1891]

My wife and I have been reading about the cost of living in various areas and Alabama has a tax structure that appears very affordable. What's the downside? No State tax on retirement income and the property tax on a $100k home is $300. Sounds too good to be true. Is there a higher sales tax? The State has to get income somehow.

We're planning a trip to Dadeville to investigate further. I was looking for some opinions from people who relocated to retire in Alabama.

Thanks for replying

[mccarley]

Most places in Alabama have around 9 or 10% sales tax. I think.

[Reactionary]

There are few State services and the State just makes do with less money. Don't count on public transportation, senior services, etc. Raising taxes is pretty much off the table - I don't know of a State politician who pledged to raise taxes...

The State sales tax is 4%, plus County sales tax (e.g., Madison County is 0.5%), plus City sales tax (e.g., Huntsville is 3.5%) - most places range about 6% to 10%.

[Ode1891]

Thanks. We're looking at a trip to Dadeville (?) to get a flavor of the area. We're pretty rural here but taxed like crazy. Property tax runs about 1.05% but will probably go up since the assessed values are dropping so much. The other concern is heating oil etc has gone through the roof. My humble rancher draws $3,000 a year for property tax and electric bill is $300 a month but I heat with wood and oil. Thats a pile of money to a retiree.

[southernnaturelover]

Most people use electric heat pumps here, I don't think I have ever seen anyone use oil for heat. You should easily be able to keep your power bill under $200 for a normal size home. Alabama does charge sales tax on groceries, I notice that's something people from other states have a hard time getting used to. You also have to pay a tax/fee every year when you get your tags renewed, the newer the vehicle the more you pay.

[jakabedy]

You need to check your sources on the taxation on retirement income. I think that is dependent on the source of the income -- like whether it is a military or civil service pension vs. just a private pension or investments.

[Southlander]

That seems like a really low property tax bill on a $100,000 house. There is a tax exemption or reduction for the elderly, but it's tagged to income, too. My mom always had to pay it...she died at age 84.

[Threestep2]

Is the property tax 300 or 3k?

[Keeper]

There is no state income tax IF your pension is gov't or civil service or if it is listed on an exempt list.
Don't know about Dadeville but in my part of NE AL property tax would be around $300.00 for a 100K home. Sales tax on food is a bummer but could be worse.
I am retired and live comfortably on less than 30K a year with no house payment or car note. Most retired ppl I know from other states are very happy here. You get more house for your money here.

My utilities run around $200 a month for electric, water and gas (fireplace).

We have senior centers and several other 55+ groups. One takes trip all around the south, the other has a multitude of various classes and get togethers. The Senior Center in my town serves lunch during the week for $1.00 and also delivers lunch to homebound seniors.

[southernnaturelover]

In my part of the state property taxes would be around $500 for a $100k home, that's still a bargain compared to what it would be just across the line in Florida.

I get the best of both, I pay low prop taxes in AL yet I can drive to Sams in Pensacola once a month to stock up on tax free groceries.