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Tax Benefits of Homestead Exemption in Alabama

A Homestead Exemption in Alabama is a tax reduction that a property owner may be eligible for if they own a single-family dwelling and occupy it as their principal residence on the start day of the tax year for which the owner is applying (October 1). Because the Homestead Exemption is not automatic, it must be requested at the Revenue Commission office

Who Qualifies for Homestead Exemption in Alabama?

All citizens of Alabama who own and use single-family residences, including mobile homes, as their primary residences and use their property for no extra purpose are eligible for Homestead.

All citizens of Alabama who occupy single-family residences, including manufactured homes, as their primary residences, use their property for no other purposes and are legally blind (“20/200”) or age 65 older with an annual adjusted gross income of $12,000 or less as reflected on their most recent State Income Tax Return are eligible for Homestead 

People of Alabama who own and occupy single-family residences, including manufactured homes, as their primary residences, use their lands for no other reason and are age 65 or older with a combined taxable income of $12,000 or less on their most recent Federal Income Tax Return are eligible for Homestead 

People of Alabama who own and occupy single-family residences, including manufactured homes, as their primary residences, use their lands for no other reason are 65 or older with a combined taxable income of more than $12,000 on their most recent Federal Income Tax Return and an adjusted gross income of more than $12,000 on their most recent Alabama State Income Tax Return are eligible for Homestead.

Exemptions from Homestead Exemption in Alabama

Exemptions from Homestead Exemption in Alabama

Homestead exemptions are divided into four categories:

Exemption 1. For State taxes, the homestead exemption in Alabama is $4,000 in assessed value, while for County taxes, it is $2,000 in assessed value.

Exemption 2. This exemption is also accessible to taxpayers who have retired due to total and permanent incapacity (inability to work), regardless of age.

Exemption 3. Owners who have retired owing to total and permanent disability also qualify for this exemption (unable to work). Property owners eligible for an H3 exemption are exempt from all ad valorem taxes.

Exemption 4. This exemption applies to the State part of ad valorem taxes and the first $2,000 of assessed value on County taxes.

Alabama Homestead exemption form

Check out this downloadable file for Regular Homestead Exemption Claim Affidavit form:

https://www.calhouncounty.org/forms/Regular_Homestead_Exemption_Claim_Affidavit.pdf

What is a Homestead affidavit

What is a Homestead affidavit

The Homestead Real Estate Tax Exemption lowers each qualifying home’s assessed value, resulting in a lower Real Estate Tax bill. You may be eligible if you match the following criteria for the 3-year Conditional Homestead exemption:

• You inherited your home from a deceased relative, but only the dead person’s name appears on the most current deed, not yours.

• Your home has a fraudulent mortgage or deed recorded against it.

• You bought the house through a rent-to-own agreement (also known as lease/purchase agreements or installment land contracts) and paid all or part of the purchase price, but your name is not on the deed.

Fill out the Homestead affidavit and supply all required papers to apply for the 3-year Conditional Homestead.

Property taxes in Baldwin Country

Property taxes in Baldwin Country

For a home valued at $177,200, the median property tax in Baldwin County, Alabama, is $557 per year. Property taxes in Baldwin County average 0.31 percent of a property’s assessed fair market value.

Baldwin County has one of the shortest median property tax rates in the US, with only 2300 of the 3143 counties having a lower property tax rate than Baldwin County.

Final Thoughts

If you own property in Alabama and complete several other qualifications, you may be eligible for a Homestead Exemption. This exemption gives you a property tax break, but it isn’t automatic. You’ll have to figure out what you’re eligible for and then apply for it.

Though you bought a house within the last year, you are liable for paying the bill, even if it is not under your name. Even if an account isn’t mailed to you, it is your responsibility to pay it.

These all sound somewhat confusing, but one simple thing is saving money on your property taxes if you meet specific requirements. Anyone who qualifies for the Homestead Exemption should apply.

For more information about Homestead application in Alabama, feel free to contact our team of experts today!

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