Property Tax

Homesteads

A homestead exemption is defined as a single-family owner-occupied dwelling and the land thereto, not exceeding 160 acres. The property owner may be entitled to a homestead exemption if he or she owns a single-family residence and occupies it as their primary residence on the first day of the tax year for which they are applying. To claim your homestead exemption, please contact your local county office.

Homestead Summary Chart

Homestead FAQs

WHAT IS ACT 2012-313?

The Alabama Legislature passed Act 2012-313 during the 2012 regular session that will change the qualifications for receiving a total exemption from ad valorem taxes for individuals who are either disabled or age sixty-five (65) and older. The effective date of Act 2012-313 is August 1, 2012. To qualify for this exemption, the taxpayer must be either:

1. Age 65 and older and have combined net taxable income of the taxpayer and his or her spouse on their latest United States Tax Return of $12,000 or less.

2. Retired because of permanent and total disability and the combined net taxable income of the taxpayer and his or her spouse on their latest United States Tax Return is $12,000 or less.

WHAT IS NET TAXABLE INCOME?

Net taxable income is the adjusted gross income less personal exemption and deductions. The net annual taxable income can be determined by referring to Line 43 of Form 1040, Line 27 of Form 1040A, or Line 6 of Form 1040EZ on the 2011 Federal Income Tax Return. The amounts entered on these lines are the net annual taxable income.

WHAT DOCUMENTS/FORMS WERE SUPPLIED TO ALL TAX ASSESSING OFFICIALS?

The Department of Revenue supplied each taxing official with the following documents:

a. A "Taxpayer Letter" explaining the law change and the need for recertification. b. A "Homestead Exemption Recertification Form" for taxpayers to complete and return to their local county office. c. A general purpose "Homestead Exemption Application Form" for all new applicants to complete when applying for any homestead exemption. d. A memo detailing what line on the Federal Income Tax Returns to use in the verification of the income requirement contained in the act.

WHEN SHOULD THE FORMS BE MAILED TO TAXPAYERS?

The Department recommends that the taxpayer recertification documents be mailed no earlier than the end of September so that the documents are delivered to taxpayers October 1, 2012, because they need to verify they meet the requirements of ACT 2012-313 on October 1, 2012.

WHICH TAXPAYERS SHOULD RECEIVE THE FORMS?

The Department recommends that the taxpayer letter and the homestead exemption recertification form be sent to each taxpayer who presently has a total exemption from ad valorem taxes based on age or disability.

DO ALL TAXPAYERS AGE 65 OR OLDER HAVE TO RECERTIFY?

Every taxpayer who has a homestead exemption based on being age 65 and older should have their exemption recertified because of the expanded income limitation (increased from $7,500 to $12,000). Taxpayers who may not have been eligible previously may now meet the income limitation and some who were eligible may not meet the new requirements.

WHEN EVALUATING THE INCOME REQUIREMENT, WHOSE INCOME SHOULD BE CONSIDERED?

When verifying income, the tax assessing official should consider the combined net taxable income of both the taxpayer and his/her spouse. The spouse’s income is still required even if his or her name is not on the deed to the property.

SHOULD THE TAXING OFFICIAL KEEP COPIES OF THE SUBMITTED FEDERAL INCOME TAX RETURNS?

The Department recommends that a copy of the taxpayer’s submitted federal income tax return (with SSN redacted) be kept on file for audit documentation purposes when the recertification takes place, and for all new total homestead exemption applications approved.

WHAT DOES THE PHRASE "EQUIVALENT INCOME DOCUMENTATION" REFER TO?

If the taxpayer who is applying for the total exemption is not required to file a federal income tax return, then they must provide some other documentation to satisfy the income provision of ACT 2012-313.  This other documentation can be as simple as a signed affidavit attesting to the fact that the taxpayer has income below the federal filing threshold and no return was filed for the most recent year.

WILL TAXPAYERS WHO HAVE PREVIOUSLY BEEN GRANTED A HOMESTEAD EXEMPTION FOR BEING BLIND HAVE TO RECERTIFY?

No.  The only taxpayers who are required to recertify are those receiving a homestead exemption based on age or disability.

I AM OVER 65. DO I HAVE TO PAY PROPERTY TAXES?

If you are over 65 years of age, you are exempt from the state portion of property tax. However, you may or may not be exempt from the county portion, depending on your income. Please contact your local taxing official to claim your homestead exemption. For county contact information, view the county offices page.

IF A PERSON IS ON RETIREMENT DISABILITY AND THEIR COMBINED NET TAXABLE INCOME IS GREATER THAN $12,000, WHAT EXEMPTION SHOULD THEY BE GRANTED?

This taxpayer will still be eligible for a total exemption from state ad valorem taxes, and because their income is above the $12,000 limitation, they will be eligible for the regular $2,000 county homestead exemption.

SINGLE FAMILY RESIDENTIAL HOMES PURCHASED FOR VETERANS WITH FUNDS AWARDED FROM A SPECIALLY ADAPTED HOUSING GRANT AS AUTHORIZED BY PUBLIC LAW 702, 80TH CONGRESS AS AMENDED BY (38 U.S.C.§ 701 AND CHAPTER 12) ARE EXEMPT FROM AD VALOREM TAXES. DO THE INCOME LIMITS APPLY TO THE PROPERTY OWNER?

Any house acquired under this federal law is exempt from ad valorem taxation, as outlined in 40-9-20, as long as the property is owned and occupied by the veteran or his unremarried widow. The only thing exempted under this provision is the house. The taxpayer would still have to qualify for a homestead exemption on any acreage associated with their property. To be eligible for this federal grant, the veteran must have a “permanent and total” service-connected disability. Any associated land with the house is not exempted under 40-9-20. Therefore, to be totally exempt under 40-9-21, the taxpayer must still meet the income $12,000 combined net taxable income on their most recent federal income tax return.