Alabama · Population 198,440 · Updated March 2026
How far your income goes in Montgomery
State-level tax rates that affect your costs
Montgomery is significantly cheaper than the national average, making it an attractive option for budget-conscious individuals and families. With a cost index of 64 (where 100 equals the national median), Montgomery residents can expect to pay median rent of $1,059/month while earning a median household income of $55,687/year.
The median home value in Montgomery, AL is $148,500, with typical monthly owner costs around $1,023 including mortgage, insurance, and taxes. The median rent-to-income ratio of 22.8% means housing is relatively affordable here — well below the 30% threshold that HUD considers cost-burdened.
Alabama has a moderate income tax rate of 5.0%. Combined with a 4.0% sales tax rate and 0.41% effective property tax rate, the overall tax environment is a factor in the total cost of living in Montgomery.
Common questions about living costs in Montgomery
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