Alabama’s Property Taxes Structure

 Alabama’s real estate market resilience to property taxes 

Alabama has essentially boomed in real estate to the landlords, tenants, buyers, sellers and other investors in the real estate market for the past few years. Alabama’s low property taxes primarily benefit those who own homes, farms, and timberland whereas  Alabama’s taxes are average to that of the U.S. state in the form of a percentage of GDP comparatively smaller share. Apart from this,  income taxes are also lower than the national average.

Tax System in Alabama State

Property taxes in Alabama are based on the value of the property as per the market trends in property which can be applied to the assessed value currently up to 10% of the market value.

Every year on Oct.1st Alabama property taxes are due and calculated based on property’s value depending on the factors considered for the use of property in terms of residential property, the assessed value is 10% of the market value which depends on the variations on mill rates at the local level available to homeowners. However, effective property tax rates are the median amount of property taxes actually paid each year as a percentage of the median home value.

Jefferson is the largest county in Alabama and most populous among other states of Alabama with the highest property tax rate with its base millage rate is 28.2. Total property taxes in Alabama, Montgomery County vary according to the city rates which begin at 14.0 mills. 

On average Mobile County pays $696 annually in property taxes as actual payments depend on home value which is the 5th highest of the nation and the millage rates in Mobile county begin at 44.5 depending on location. 

Property Taxes in Alabama

Alabama homeowners pay property taxes every year which is a major source of revenue for local governments that collect $40 billion in taxes of the total property taxes in Alabama.

Alabama property tax bill adds up to $658 with homeowners which is  $4.16 for home value in property taxes for $1000.

During the 2020-21 financial year, the property tax range in Alabama in terms of statewide millage is 6.5 charged by the local authorities.

Time to pay property tax in Alabama

The property taxes in Alabama are paid to the owner of the property from October 1until December 31 without any penalties after that due dates result in a penalty is up to 10%. Notices are sent to those homeowners on January 1 who are delinquent in tax.

Property auctions are conducted in may and homeowners can redeem their property within three years because of the sale for auction after paying the delinquent property taxes in Alabama.

Property taxes in Alabama are valued as per the market rate, however, a successful appeal can lower Alabama property taxes within 30 days from the date of the notice in between officers examining the evidence for the valuation and a hearing is set for you before the Board of Equalization (BOE). If the appeal for property taxes is accepted the Circuit Court grants concession otherwise the Circuit Court makes it mandatory to pay Alabama property taxes by December 31.

Property Taxes exemptions in Alabama

The state of Alabama offers exemptions to eligible homeowners to reduce the Alabama property tax bill. Homeowners apply for exemption in Alabama based on the assessed value for county taxes. Senior citizens of Alabama receive an equal exemption of their property's assessed value whereas other property tax exemptions include the disabled veterans' exemption which is available on the revenue department website of Alabama.

If you are planning to buy a home in Alabama, We hope that it will help you to understand the property tax structure in Alabama. Constitutional and statutory governing bodies propose changes in the property tax in Alabama as per the current funding status of all states and local taxes on a timely basis. However, real property tax rates in Alabama are the lowest in the nation since Alabama has a median effective real property tax rate of 3.33 of real property value.