Property tax relief for seniors in Alabama

Who qualifies

To get a homestead exemption in Alabama, you must:

• Own the home as of October 1, the date taxes are set each year.
• Live in it as your main home. It must be a single-family home you live in yourself.
• Have no more than 160 acres with the home.
• For the senior exemptions, be 65 or older.

People who are permanently and totally disabled, or blind, can also get exemptions at any age. This page focuses on people 65 and over.

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The exemptions for people 65 and over

Alabama's county offices use codes for each level. Which one you get depends on your income.

What each level means

• The state part is free for everyone 65 and over. There is no income limit for this. County and city taxes may still be due.
• The regular county exemption takes $2,000 off the assessed value of your home for county taxes. Some local governments give up to $4,000.
• H-2 is for people with modest income. It cuts county taxes too, including school taxes.
• H-3 is the "principal residence" exemption. If your federal taxable income is low enough, you pay no property tax on your home at all.

Why the income tests can be confusing

The H-2 test uses your Alabama adjusted gross income. The H-3 test uses federal taxable income for you and your spouse. Many retirees with only Social Security have little or no federal taxable income. If you do not file a tax return, the rules let you show your income with "other appropriate evidence," such as benefit letters. Ask your county office what it accepts.

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The 7% assessment cap

Alabama law limits how fast the taxable value of homes and other Class III property can rise.

• The taxable assessed value cannot go up more than 7% a year.
• It is automatic. You do not need to apply.
• It started with values set October 1, 2024, and runs through the tax year beginning October 1, 2027.
• You lose the cap if you sell the home (gifts or low-cost sales to a spouse or family member do not count), if the property type changes, or if you add a major addition or improvement. Normal upkeep does not count.

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Baldwin County senior freeze

Baldwin County has its own value freeze under a state rule. If you are 65 or older on October 1 and have lived in the home as your main home for at least 10 years (they do not have to be in a row), your assessed value can be frozen at the prior year's level. You claim it the same way as a homestead exemption at the county office. Ask your county if anything similar applies where you live.

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How to apply

1. Go to your county tax office. This may be called the tax assessor, revenue commissioner or license commissioner. The Alabama Department of Revenue has a county office directory on its website.
2. Apply at the right time. Applications for the current tax year are taken from October 1 through December 31. An application made at other times of the year applies to the next tax year.
3. Bring proof. For the income-based levels, bring your latest Alabama return (H-2) or your and your spouse's latest federal return (H-3). If you do not file a return, ask what other proof the office takes. Call ahead to ask what proof of age and of living in the home your county wants.
4. For disability, the county office uses the Physician's Affidavit, Form PT-PA-1, or proof of a disability pension.

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After you apply

• Each year: If you qualified for an income-based level, you must confirm each year by mail that you still qualify. Watch for the form from your county office.
• If you move or sell, the exemption on your old home ends. Apply again for your new home.
• Give true information. Anyone who gets an exemption with false information can be ordered to pay twice the tax due, for up to 10 years back, plus interest.

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Things people miss

• Not applying at all. The state exemption is not automatic. You must claim it at your county office.
• Assuming your income is too high. The H-3 test uses taxable income, which is often much lower than your total income.
• Missing the December 31 date. A late application waits until the next tax year.

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Free help

Your county tax office is the main place for help. For questions about state rules, see the property tax pages at revenue.alabama.gov. For other help in Alabama, including help with bills, call 1-800-AGE-LINE (1-800-243-5463).

See all benefits in Alabama for Medicaid, energy help and more.

Phone numbers: Free help lines for Alabama agencies

Check what you may qualify for