Alabama Caps Annual Property Tax Assessment Increases at 7%

Legislation updates continue to come out of the state of Alabama. House Bill 73 by State Representative Phillip Pettus (R-Killen) and State Senator David Sessions (R-Grand Bay) would cap yearly property tax increases at 7% after a reappraisal. The bill made it out of the House, and the Senate Budget Committee approved. The bill now moves to the full Senate. The experts at Ryan anticipate this vote to pass.

The law is set to take effect on October 1, 2024, and will impact the 2025 property tax assessments. The legislation expires after three years and will then need to be reapproved.

Exceptions to the 7% cap include:

• Real property that has never been assessed.
• Additions or improvements to real property, including new construction, not including repairs to or ordinary maintenance of an existing structure or the grounds of the property.
• Changes to the classification of the property.
• Changes in ownership of the property, except for transfers between spouse or family members for no or nominal consideration, including upon death of the owner and transfers because of redemption after foreclosure of a mortgage, tax sale, or tax lien.
• Property located in a tax increment district.

The local tax experts at Ryan are here to help. We believe there are still opportunities for tax minimization for our clients with the new caps in place because of reluctance to proactively reduce values in today’s climate. We encourage you to reach out to us with questions to request assistance with tax minimization across Alabama.

TECHNICAL INFORMATION CONTACTS:

Brad Wallace
Principal
Ryan
404.942.6346
brad.wallace@ryan.com

Adam Travis
Senior Manager
Ryan
404.435.0024
adam.travis@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.