Alabama Legislature Passes 7% Annual Cap

This update outlines recent legislative developments affecting commercial property taxation in Alabama. It reflects analysis prepared by an APTC member firm based on conditions at the time of publication.

The Alabama legislature recently enacted a bill (HB73) that will establish a 7% cap on annual increases in assessed values for most real property parcels in the State.

The cap will go into effect beginning with the 2025 tax year (valuation date as of 10/1/24). The 7% cap shall not apply to: (i) real property that has never been assessed, (ii) new additions and improvements, excluding repairs and ordinary maintenance, (iii) changes in classification, (iv) changes in ownership, excluding some family transfers and redemptions, and (v) properties located within a tax increment district.

The cap legislation has a sunset provision of three years, meaning that the legislature must renew the legislation to extend the cap beyond the 2027 tax year.

Aaron D. Vansant, Esq.
DonovanFingar, LLC
Member Firm, American Property Tax Counsel

For guidance on how these developments may apply to your property or portfolio, please contact the representative listed above.