Under Alabama law, a Homestead Exemption is a tax deduction a property owner may be entitled to if he or she owns a single family residence and occupies it as his/her primary residence on the first day of the tax year (October 1st). The Homestead Exemption is NOT automatic and the owner must go to the tax assessor’s office in the county where the property is located to file for the exemption. In Alabama, there are four Homestead Exemptions. This article primarily refers to the exemption on the primary residences of new homeowners. For an overview of each exemption, click HERE.
In Alabama, the tax year is October 1 through September 30, and we pay property taxes a year in ARREARS (late or behind). Alabama law states the tax bill becomes due on October 1 of any given year and must be in the name of the owner whose name was on record for the property on October 1 the year before. (For example, if you purchased property in January of this year, the tax bill you receive will still list the previous property owner’s name.) The current property owner is responsible for paying taxes on all property, regardless of who the bill is addressed. Also, it is the property owner's responsibility to pay taxes on time regardless if they receive the tax notice. The county is not required by law to send tax bills to property owners.
Applying for Homestead Exemption
Filing your Homestead Exemption in Alabama is easy. The key is making it a priority and getting it done on time. Here are a few key things to remember:
- You must close and take ownership of the property before October 1.
- The deadline to file your homestead is December 31.
- You must show proof of ownership of the property. This is typically evidenced by a copy of the deed.
- The property must be your primary residence.
- You have to file your homestead exemption with the tax assessor’s office (it is not automatically done for you).
- You only have to file your primary residence homestead exemption once.
For more information about filing your homestead exemption in your county, click HERE for contact information for each county tax assessor’s office.
Additional Resources
FAQs
This exemption allows the property owner to deduct up to $4,000.00 in state tax and $2,000.00 in county tax from the total assessed value of the property. You must own and occupy the property as your primary residential address. There must be a signed assessment sheet.
At what age do you no longer have to pay property taxes in Alabama? ›
If you are over 65 years of age, or permanent and totally disabled (regardless of age), or blind (regardless of age), you are exempt from the state portion of property tax. County taxes may still be due. Please contact your local taxing official to claim your homestead exemption.
How many acres can you homestead in Alabama? ›
A homestead is defined as a single-family owner-occupied dwelling and the land thereto, not exceeding 160 acres.
What is the H1 homestead exemption in Alabama? ›
H1: Homestead Exemption 1 is available to all citizens of Alabama who own and occupy single-family residences, including manufactured homes, as their primary residences and use their property for no other purposes.
How many homestead exemptions can you have in Alabama? ›
In Alabama, there are four Homestead Exemptions. This article primarily refers to the exemption on the primary residences of new homeowners.
How to calculate property tax in Alabama? ›
For example:
- $100,000 (Appraised Value) X (Residential Rate: 10%) = $10,000 (Assessed Value)
- $10,000 (Assessed Value) X . 0325 (County Millage Rate of 32.5 mills) = $325 (Tax Amount)
In Alabama, qualifying property owners may claim a homestead exemption. Additionally, taxpayers 66 years old and over and those who are permanently and totally disabled or blind may qualify for additional exemptions. Any one of these exemptions could remove significant cost from your property tax burden each year.
How much can a 70 year old earn without paying taxes? ›
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...
What age do you stop filing taxes? ›
At What Age Can You Stop Filing Taxes? Taxes aren't determined by age, so you will never age out of paying taxes.
Can you have two homesteads in Alabama? ›
In Alabama, a homestead exemption is available for a single-family owner-occupied dwelling and the land thereto not exceeding 160 acres. Only one homestead is granted regardless of how much property is owned within the state.
The truth is you can be self-sustaining on a 1-acre property but it takes work, education, dedication, and time. So, if you have an oversized lot or small acreage and want to be as sustainable as possible, here are some ideas and suggestions on how to get started creating a self-sufficient homestead.
Do you pay property tax in Alabama after age 65? ›
Taxpayers age 65 and older with income greater than $12,000 on their most recent Alabama Income Tax Return are exempt from all of the state portion of the ad valorem taxes and receive the regular homestead exemption ($2,000 assessed value) on county taxes.
What is the h3 homestead exemption in Alabama? ›
Homestead Exemption 3 is for residents of Alabama 65 years of age or older with net taxable income of the combined taxpayer and spouse of $12,000 or less on their most recent Federal Income Tax Return. Residents who are permanently and totally disabled, regardless of income, are entitled to this exemption also.
Who is exempt from paying property taxes in Alabama? ›
Code of Alabama 1975,
If you are sixty-five years or older, you are entitled to an exemption from State property taxes. If you are sixty-five years or older or you are retired due to total and permanent disability, you may also be entitled to additional exemptions based on your income.
Does Alabama tax social security? ›
Is Social Security taxable in Alabama? Alabama is one of 38 states that fully exempt Social Security from income taxes. The state will not tax any income you receive from Social Security disbursem*nts.
What does homestead exemption mean in Alabama? ›
A homestead exemption is defined as a single-family owner-occupied dwelling and the land thereto, not exceeding 160 acres.
How much is the property tax in Alabama? ›
Simply enter the assessed value of your property and choose your county to get an estimate of your property tax amount. The property tax rate in Alabama varies by county, with an average rate of 0.423%. This means that for every $1,000 of assessed value, the property owner would pay $4.23 in property tax.
What property is exempt from creditors in Alabama? ›
Personal Property Exemptions
The personal property exemption will protect property as varied as household goods and furnishings, automobiles, computers, jewelry, lawn mowers and lawn tools, personal tools, bank accounts or proceeds from a lawsuit for personal injury.
