Fairhope Single Tax Corporation

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​Frequently Asked Questions

 

Q:  Where is Fairhope located?

A:   Fairhope is located in southeast Alabama on the eastern shore of Mobile Bay.

 

Q:  When was Fairhope established?

A:   Fairhope was established in 1894 by a group of single-taxers from Iowa who formed the Fairhope Industrial Association. The Fairhope Single Tax Corporation was incorporated in Alabama in 1904. The City of Fairhope was incorporated in 1908. The City of Fairhope is a governmental entity. The Fairhope Single Tax Corporation is a private, 501(c)(4) not-for-profit corporation. The Fairhope Single Tax Corporation is not connected with the City of Fairhope or with Baldwin County.

 

Q:  Why is Fairhope called a Single Tax Colony?

A:   The people who established Fairhope wanted to create a community that would, as best they could, implement the theories of economist and social activist Henry George. George wanted government to tax the full rental value of land, the value of which is created by community improvements and not by labor or invested capital. He felt that if the full rental value of land were taxed (including minerals under the land), that all other taxes could be abolished, thus becoming the single tax. Others termed his theories the Single Tax and the name stuck.

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Q:  Does Fairhope really practice the single tax theory as proposed by Henry George?

A:   Henry George wanted his land tax theories to be implemented in the country as a whole; he never intended for them to be applied in a single community. Thus the founders of Fairhope had to make some adjustments to make it work. In the early years of the Single Tax Corporation, the effort was closer to the single tax theory, but the Alabama Constitution prohibits a property tax just on land and not improvements. Today, people lease the land from the Single Tax Corporation and pay rent that includes their state and local property tax on land and buildings, a "demonstration fee" for community improvements that is based just on the value of the land, and an administrative fee for the administrative costs of the office.

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Q:  Is the entire City of Fairhope owned by the Single Tax Corporation?

A:   No. The Fairhope Single Tax Corporation, also known as the Colony, owns about 4,500 acres of land in and around Fairhope, both inside and outside the city limits, which is about 25% of Fairhope. Just as those citizens that are not within the city limits of Fairhope do not pay city taxes, those citizens that are not FSTC Lessees do not pay the FSTC demonstration fee. The majority of Colony land is located in the downtown area and moving East in proximity to Fairhope Avenue. The original settlers began buying up land with their pooled resources. People were already living here, so the Colony could only buy what was for sale--hence, the patchwork location of Colony property! The Colony continued to acquire property until about the 1950s, so Colony land is not contiguous.

 

Q:  Must one join the Single Tax Corporation to buy a house on colony land?

A:   No. Lessees of Colony land are not required to become Members of the Corporation, but they are welcome to.

 

Q:  How does one become a member of the Single Tax Corporation?

A:   To become a member of the Fairhope Single Tax Corporation one must take a course on Henry George and the Single Tax, submit an application and petition signed by three current FSTC members, pay $100 membership fee, and be voted upon by the Directors of the Single Tax Corporation.

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Q:  If I buy a house on colony land, do I have full control over what I can do with the land?

A:   Everyone buying a house on Colony land or leasing unimproved land is required to attend an orientation session where you are informed that, although you own the house and any improvements, you are leasing the land. Every time a property transfers, a new 99-year lease is issued. The Lease reserves all mineral and subsurface rights for the Colony and prohibits the operation of a dirt pit or the selling of the dirt. In addition, the Lease restricts all activity to lawful activity and a lessee is not permitted to grant easements across the property without FSTC's acknowledgement. The addition or deletion of any improvements and the applicable use or zoning of a piece of property is entirely within the oversight of the City of Fairhope Planning and Zoning Department (if applicable), Baldwin County Planning and Zoning Department (if applicable), and/or any recorded neighborhood covenants and restrictions (if applicable). In other words, just like fee simple property, if a lessee wanted to build a house or open a business, the lessee would seek the necessary permits from the applicable governmental agency, subject to all covenants, restrictions, and zoning laws. The only difference is that the application for the permit requires FSTC's signature as the owner of the land and the lessee's signature as the lessee of the land. 

 

Q:  Do I pay Rent to the Single Tax Corporation and Taxes to the state, county, and local governments?

A:   No. The Rent paid by lessees to the Single Tax Corporation includes ad valorem taxes that are due to state and local governments. Lessees do not make any direct ad valorem payments to state or local governments. The FSTC office pays the ad valorem taxes to the Baldwin County Revenue Office. All soon-to-be-new lessees, either by foreclosure, purchase, inheritance, or other, MUST bring any and all outstanding Rent current before receiving a new Lease. FSTC currently accepts cash or check only for Rent payments; online payment is not available.

 

Q:  What is included in my Rent to the Single Tax Corporation?

​A: The Rent paid by lessees includes, (1) the taxes on the land and taxes on the improvements, both of which are passed through to the Baldwin County Revenue Office, (2) an Administration Fee which covers a portion of the costs of administering the FSTC office (currently $105.00 per year), and (3) a Demonstration Fee which is put back into the community to demonstrate the usefulness of the single tax concept (currently 0.2% of the County's current appraised value of the land).

For example, let us assume we have a home and lot that the County has valued at $200,000.00 for the improvements and $50,000.00 for the land. At 10% tax rate (Class III), within the city limits of Fairhope (0.046 millage rate), without homestead or any tax exemptions, the Rent would be calculated as follows:

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             Taxes on the Improvements, passed through to the County ($200,000 x 10% x 0.046):    $920.00

             Taxes on the Land, passed through to the County ($50,000 x 10% x 0.046):                        $230.00

             FSTC Administration Fee:                                                                                                                   $105.00

             FSTC Demonstration Fee (0.002 x $50,000.00):                                                                           $100.00

             Yearly Rent:                                                                                                                                             $1,355.00

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​​Q:  Where do I go to discuss the County's valuation of my land and improvements, claim my homestead, discuss my tax classification, apply for tax exemptions, or discuss County deadlines?

A: You will need to visit the Baldwin County Revenue Office located at the Fairhope Satellite Courthouse. Only the Revenue Office can grant tax exemptions, grant homestead exemptions, or discuss tax classifications and valuations. A link to the Baldwin County Revenue Office is located on our "Helpful Links" tab. The County site provides information about the breakdown of taxes, the millage rates, the tax classifications, available tax exemptions, and County deadlines for making claims and changes. When a lessee makes any changes with the County, the lessee will need to bring the Assessment Sheet (provided by the County) back to the Fairhope Single Tax Office so we can update the lessee's account. Note: if a lessee is completely exempt from taxes, the lessee will still pay Rent to FSTC--the lessee's Rent will consist of the Administration Fee and the Demonstration Fee only.

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Q:  What is the Demonstration Fee used for?

A:   The demonstration fee funds projects that benefit the community, such as parks, sidewalk improvements, the public library, the hospital, etc. Please see our list on FSTC Contributions.

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Map of Fairhope Single Tax Colony Property

Blue Hash-marked - Fairhope Single Tax Colony Land

Gray - Parcels that are inside the city limits of Fairhope

Green - Parcels that are inside the city limits of Daphne

** FSTC property lies both in and outside the city limits of Fairhope.

** A link to the County Map (where you can zoom in) is available under Helpful Links.

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