STATE OF ALABAMA TAXING AUTHORITIES
When purchasing an investment property you will want to know the annual tax bill as this will pay a part of your overall budget. Below are some of the most common counties that investors look in when searching a property.
Calculating Your Property Taxes
In the State of Alabama, property tax is based on three factors:
- Property Classification
- Millage Rate
Your Alabama taxes are calculated using your property’s assessed value. This is determined by multiplying the appraised value by the corresponding property classification, which is also known as the assessment rate.
Appraised Value X Property Classification = Assessed Value
For more information regarding property classification, view Classes of Property.
Once the assessed value of your property has been determined, multiply it by the appropriate millage rate for the area in which you live. Millage is the tax rate expressed in decimal form. Millage rates are determined by the county commissions and other taxing agencies.
- A mill is one-tenth of one cent. (.001)
- 1 mill = $0.001
- 10 mills = one penny or $0.01
- 100 mills = ten cents or $0.10
- 1000 mills = one dollar or $1
Assessed Value X Millage Rate = Unadjusted Tax Bill
- $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) = $325.00 (Tax Amount)
To calculate your current millage rate, view Millage Rates.
Please note: The Property Tax Division takes no responsibility for and makes no assertions as to the accuracy of the millage rate information.
After determining your unadjusted tax bill, subtract any exemptions you might have. This gives you the adjusted tax bill.
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. Please visit your local county office to apply for a homestead exemption.
Unadjusted Tax Bill – Exemptions = Adjusted Tax Bill
For more information regarding homesteads and Title 40-9-19 through 40-9-21, view the Code of Alabama 1975.
Although the information provided on these websites may tell you what the annual tax bills would, please consult a title company agent. A closing agent can pull a specific property tax certificate just to make sure you get a clear picture of how the county has the billing setup. If you are buying a property for an investment the billing could be different than a homestead or over 65 billing structure.
The above information was provided at http://revenue.alabama.gov/advalorem/