Fairhope, Alabama is one of two cities in the United States that operates as a Single Tax colony. What is the single tax colony and what does it mean to me if I choose to purchase property in Fairhope, Alabama? This question is asked frequently by those who are interested in purchasing property in Fairhope, which may be owned by The Fairhope Single Tax Corporation (FSTC).
Fairhope has an interesting history dating back to an evening in November, 1894 when a group of men, led by E.B. Gaston, left Des Moines, Iowa seeking to establish a ideal community based on the ideas of Henry George, and infused with some of their own Populist beliefs. One of the members is quoted as having said,
that the "idea had a fair hope of succeeding." The group's charter was "to establish and conduct a
model community or colony, free from all forms of private monopoly, and secure to its members
therein, equality of opportunity, the full reward of individual efforts, and the benefits of co-operation
in matters of general concern."
You can read a brief history here and here. But the question is, how does this affect my real estate transaction?
First, you will not own the land upon which your improvements (structures) stand. The land is owned by the FSTC. You will receive a 99 year lease on the land.
Second, you will not receive a Deed for your property. Instead, along with the 99 year lease, you receive a Bill of Sale. After all, you did not buy the land, you bought the improvements on the land, and those improvements are personal property. Hence, the Bill of Sale.
Third, as a Lessee, you become a member of the Fairhope Single Tax Corporation, and you may attend meetings, become involved in the Board, if you choose, or not. But essentially, it is the legality that is different and the taxation is included in the rent you pay to the Single Tax Corporation. This is explained on the website for the Fairhope Single Tax Corporation.
As the rents are collected, the corporation chooses what to do with those monies, some of which go into the demonstration fund. This fund is used for improvements for everyone to enjoy including 63 acres of public land on the bayfront, where the parks are maintained and enjoyed by the public, 24 acres for Founders Park, which includes athletic fields, and a 43 acre city nature park, and many other projects that lend to the beauty and comfort that we know as home.
For more information, please visit the Fairhope Single Tax Corporation website.
