Moving to Alabama: What to Know About Property Taxes (2026 Guide)

If you are relocating to the Gulf Coast, here is the best news you’ll hear all day: Alabama consistently has some of the lowest property taxes in the United States. While other states might charge $5,000 or $10,000 a year for a standard family home, many Alabama homeowners pay a fraction of that. However, the system works a bit differently here. Here is the "cheat sheet" for Mobile and Baldwin County.

1. The Calculation: Market vs. Assessed Value

In Alabama, you don't pay taxes on the full market value of your home. Instead, taxes are based on the Assessed Value.

• Owner-Occupied Homes (Class III): These are assessed at only 10% of their appraised value.

• Investment/Rental Properties (Class II): If it’s not your primary residence, the rate jumps to 20%.

2. What is a "Mill"?

Tax rates are expressed in mills (one-tenth of a cent).

• Example: If your total local millage rate is 45 mills, you pay $45 for every $1,000 of assessed value.

• The Math: For a $300,000 home (Primary Residence):

  • Assessed Value = $30,000 (10%)

  • Taxes (at 45 mills) = $1,350 per year

3. The "Homestead Exemption" (Your Best Friend)

Once you move in, you must apply for a Homestead Exemption at the Revenue Commissioner's office.

• Standard Exemption: Gives you a discount on the state and county portion of your taxes.

• Over 65/Disabled: If you are over 65 or permanently disabled, you may be exempt from the entire state portion of property taxes, and in some cases, the county portion as well, depending on your income.

4. Key Dates to Remember

• October 1st: The tax year begins. Your tax bill is based on who owned the property and its status on this date.

• December 31st: Taxes are due. They are paid "in arrears," meaning your 2026 bill covers the previous year.

• The Deadline: You must claim your Homestead Exemption by December 31st to see the savings on the following year's bill.

The "Mobile/Baldwin" Difference

Rates vary slightly between Mobile and Baldwin Counties and within city limits (like Fairhope or Saraland) vs. unincorporated areas.

Want a specific estimate for a home you're looking at? Contact me today, and I’ll run the "tax math" for any address in our area!