What is the property tax rate in Alabama?
The property tax rate in Alabama averages 0.37% of market value for owner-occupied homes, according to the Tax Foundation’s 2026 ranking based on the 2024 American Community Survey. That is the lowest figure among the 47 states covered on this site.
An apartment owner should not plan around 0.37%. That figure reflects homeowners, who are assessed at 10% of value and usually claim a homestead exemption. A rental apartment building is Class II property, assessed at 20%, so the same millage produces twice the tax. In much of the state, a Class II property pays between about 0.5% and 1.0% of market value each year before city millage.
How Alabama assesses property: the four classes
Alabama appraises taxable property at its fair and reasonable market value, then multiplies that value by the percentage for its class to get assessed value. The classes come from Amendment 373 to the Alabama Constitution.
Apartment buildings fall in Class II, the catch-all class for “all property not otherwise classified.” ALDOR’s guidance on the 7% cap says a home that is rented out instead of owner-occupied moves from Class III to Class II, and the same logic applies to every unit in a multifamily building.
| Class | What it covers | Assessment ratio |
|---|---|---|
| Class I | Utility property used in the utility business | 30% |
| Class II | All property not otherwise classified, including rental apartments and commercial property | 20% |
| Class III | Agricultural, forest and single-family owner-occupied residential property, and historic buildings and sites | 10% |
| Class IV | Private passenger cars and pickup trucks for personal use | 15% |
How Alabama millage works
Millage is the tax per $1,000 of assessed value, so 40 mills on $400,000 of assessed value is $16,000. Every Alabama property pays 6.5 mills to the state: 3.0 for public schools, 1.0 for the soldier fund and 2.5 for the general fund. Counties, school districts and cities levy the rest.
Alabama makes it hard to raise millage. ALDOR notes that any increase in county or city tax rates must be approved by the local governing body, the Legislature and the voters of the jurisdiction. The county’s general levy is limited to one-half of 1% of assessed value. That is a large part of why the state’s rates stay low.
Amendment 373 also sets a ceiling on the total bill. Ad valorem taxes from every taxing body on a Class II property can never exceed 1.5% of its market value in a tax year, or 1% for Class III, with exceptions for Mountain Brook, Vestavia Hills and Huntsville. The county totals in the table below stay well under the Class II ceiling; inside a high-millage city or special district, check it.
Alabama property tax rates by county
Total millage outside city limits ranges from about 25 mills to 51 mills across Alabama’s 67 counties. The figures below are from ALDOR’s October 2025 millage schedule and add the state levy, the county total and the main county school district for property outside cities. Some counties have several school districts with different rates, and city millage comes on top, so check the levies on your own parcel.
Because apartments are assessed at 20%, multiply the mills by 0.2 to get a rough rate on market value: Jefferson County’s 50.1 mills works out to about 1.0% of value outside cities, and Elmore County’s 25.0 mills to about 0.5%. Inside Birmingham, the city adds another 28.5 mills, and inside Huntsville, 35.0.
| County | Mills outside cities (2025) | Approx. Class II rate on market value | Group |
|---|---|---|---|
| Macon | 51.0 | 1.02% | Highest |
| Jefferson | 50.1 | 1.00% | Highest |
| Mobile | 48.5 | 0.97% | Highest |
| Perry | 47.0 | 0.94% | Highest |
| Bullock | 46.5 | 0.93% | Highest |
| Cullman | 26.0 | 0.52% | Lowest |
| Bibb | 26.0 | 0.52% | Lowest |
| Coosa | 26.0 | 0.52% | Lowest |
| Walker | 25.5 | 0.51% | Lowest |
| Elmore | 25.0 | 0.50% | Lowest |
The 7% cap on assessed value
Act 2024-344, passed as House Bill 73, limits the yearly increase in taxable assessed value of Class II and Class III real property to 7%. The base year was October 1, 2024, and the cap applies to tax collections starting October 1, 2025. ALDOR says the limits run through the fiscal year beginning October 1, 2027, and Tuscaloosa County’s 2026 notice insert says the cap sunsets in 2028 unless the Legislature extends it.
The cap limits increases only. If market value falls, assessed value can fall with it. A bill introduced in the 2026 session, HB167, proposed tying the limit to inflation instead of a flat 7%. We found no sign that it became law, and as of August 2026 press coverage the cap was still set to end on schedule unless the 2027 Legislature extends it, so check for any change before you rely on it.
- Parcels in a tax increment district are not capped.
- A change in assessment class, such as a home that becomes a rental, removes the cap.
- New construction, never-assessed improvements such as a pool, and significant improvements are added at full value.
- Replacing or restoring a damaged building beyond its prior condition removes the cap.
Does a sale trigger reassessment in Alabama?
Yes, while the 7% cap is in force. A change of ownership is one of the exceptions in Act 2024-344, so when you sell an apartment building, the cap comes off and the buyer is assessed at full appraised value. ALDOR lists narrow exceptions for transfers between spouses or family members for little or no consideration, transfers at death and certain redemptions after foreclosure or tax sale.
In practice the reset is small for most buildings today, because the cap only began with values set as of October 1, 2024. A building whose value rose faster than 7% a year since then carries a modest gap between capped and full value. The gap grows each year the cap stays in place, so it matters more for a sale in 2027 than one in 2026, and it disappears if the cap expires on schedule.
How to appeal your property value in Alabama
You have 30 days from the written notice of valuation to file a written protest with the county Board of Equalization, under Sections 40-3-20, 40-3-24 and 40-3-25 of the Code of Alabama. Counties count the 30 days differently. Mobile County counts from the notice date, with a postmark inside the window, and its 2026 deadline was May 27, 2026. Madison County publishes new values in the newspaper for two weeks, usually in March or April, and counts from the second notice.
If the board does not resolve it, you can appeal to circuit court. Madison County’s guidance says the circuit court appeal must be filed within 30 days of the board’s adjournment, and the taxes must be paid by December 31 or a bond posted for double the amount due.
- October 1: property taxes are due, and the lien date for the next tax year.
- Spring: value notices go out in most counties; the 30-day protest window starts.
- January 1: unpaid taxes become delinquent.
- April to May: counties advertise and hold tax sales for unpaid taxes.
Property tax exemptions for Alabama apartments
Rental apartments do not qualify for the homestead exemption or the 10% Class III ratio. ALDOR defines a homestead as a single-family owner-occupied dwelling, and the owner must live there as a primary residence on the first day of the tax year. An owner who lives in one unit of a fourplex should ask the assessor how the building is split between classes, since the fourplex is not a single-family home.
Class III also includes historic buildings and sites. If your building has a historic designation, ask the county assessor whether it qualifies for the 10% ratio, which would cut the bill in half. We did not find a general Alabama exemption for market-rate apartment buildings.
Worked example: property tax on a $2M Alabama apartment building
Take a 24-unit building appraised at $2,000,000. As Class II property, its assessed value is 20%, or $400,000. In unincorporated Jefferson County at 50.1 mills, the yearly tax is $20,040, or 1.0% of value. In Elmore County at 25.0 mills, it is $10,000. The constitutional ceiling of 1.5% of value, $30,000, is not reached in either county.
Now the sale. Suppose the 7% cap held the building’s taxable value to $1,700,000 for the 2024 base year, $1,819,000 the next year and $1,946,330 the year after, while the market value reached $2,000,000. The seller’s last bill in Jefferson County is about $19,502. After a sale at $2,000,000, the cap comes off and the buyer’s bill is $20,040, about $538 more a year. At an illustrative 6% cap rate, that costs about $9,000 of value.
The bigger number is the class. If the same building were assessed at the 10% Class III ratio, the Jefferson County bill would be $10,020. That $10,020 difference a year, worth about $167,000 of value at a 6% cap rate, is why the 0.37% headline rate overstates how cheap Alabama is for a rental owner.
| Scenario | Assessed value | Yearly tax |
|---|---|---|
| Jefferson County, 50.1 mills, Class II | $400,000 | $20,040 |
| Elmore County, 25.0 mills, Class II | $400,000 | $10,000 |
| Jefferson County, capped value of $1,946,330 | $389,266 | $19,502 |
| Same building at the 10% Class III ratio (comparison) | $200,000 | $10,020 |
| Amendment 373 ceiling, 1.5% of value | n/a | $30,000 |
What to check on your tax bill before you sell
Pull the last three bills and the current value notice before you go to market. A buyer will.
- The class on the account. A rental building should be Class II; a mistake either way changes the bill by half.
- Appraised value against the price you expect, since the cap comes off at sale.
- Whether the parcel is in a city, a special school district or a fire district, each of which adds mills.
- Any historic designation that could support Class III treatment.
- Whether a protest is pending with the Board of Equalization.
Selling an apartment building in Alabama
Skyline buys apartment buildings with five or more units in Alabama, including in high-millage areas such as Jefferson and Mobile counties. We buy directly, close on your timeline, and can work inside 1031 deadlines. We underwrite from your actual bills and value notices, so a building with a fair assessment shows that in what we can pay.
For the tax on the sale itself, see Alabama capital gains tax on real estate. For notice, deposit and eviction rules a buyer inherits, see Alabama landlord-tenant law for apartment owners.
