If you are a homeowner in Alabama, you likely received a letter in the mail notifying you that it is time to pay your property taxes. In Alabama, property taxes are due October 1^st and are delinquent if not paid by December 31^st.

If you don’t pay your taxes by the end of the year, your property could be subject to late penalties or a tax sale which occurs every spring. To avoid these problems, make sure you pay taxes on time and claim all exemptions available to you. Property taxes can be paid in person at the courthouse, by mail to the County Tax Assessor’s office, or you may ask your mortgage company to mail your property taxes for you.

How are Property Taxes Calculated?

In Alabama, property taxes are calculated by multiplying the tax-appraised value of the property by the millage rate. One mill is equal to one-tenth of a penny. This process is known as ad valorem taxes which means “according to value.” Alabama has adopted a policy of annual equalization which entails the reassessment of one-quarter of the county every year. Thus, every property is re-assessed every four years. In Madison County, for each $100 assessed value, Huntsville residents pay $5.80, rural Madison County residents pay $3.65 for improved property and $3.35 for the land, Madison City residents pay $5.75, Owens Cross Roads, and New Hope residents pay $4.05, Gurley residents pay $4.95, and Triana residents pay $4.95.

Homestead Exemption

If you own a single-family home with less than 160 acres as your primary residence as of October 1^st, you are entitled to the homestead exemption. The homestead exemption is an important tax break for property owners. To claim homestead, you will need a copy of your Deed and an Alabama driver’s license matching your property address claimed for homestead. Note that if you’re moving to Alabama and you still have an out-of-state driver’s license, additional documentation is required.

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Age/Disability Exemption

The State of Alabama exempts homeowners 65 and over from paying the state portion of property tax, although you still may owe county taxes. Additionally, if you are permanently and totally disabled, or blind, you are also exempt from the state portion of the property tax. Ala. Code 40-9-21.

Second Home Exemption

As the name suggests, the second home exemption is an important tool for people with a lake house, cabin, or other second property. This exemption keeps the property tax rate at 10%, as opposed to 20%. However, certain requirements must be met, including maintaining house insurance and utilities in your name. Additionally, in order for the second home exemption to apply, the second home cannot be rented out. In Madison County, the second home exemption must be re-claimed every year; some neighboring counties require it to be claimed only for the first year.

Income Exemption

In the event your taxable income (including that of your spouse) was $12,000 or less, you are entitled to an income-based exemption. Note that this must be reflected on your tax return from last year. Ala. Code 40-9-19(d).

Current Use

If your property is currently used for agriculture or timber, you may qualify for a current use exemption. This allows owners of farmland, pastureland, or timberland to value the property at its current use, meaning potential savings to the property owner. An application for current use must be filed between October 1^st and December 31^st. If current use is granted, there is no need to file subsequent applications, unless the property is sold to a new owner.

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For more information on Madison County taxes, visit http://madisoncountyal.gov/departments/tax-assessor or call the Tax Assessor’s office at (256) 532-3350.