7% Cap

NOTICE ABOUT ASSESSMENT VALUATION CAP

New legislation has created a limitation – or "cap" – on the assessed value for certain real property (see Code of Alabama §40-7-2.2, Act 2024-344).

Beginning with the 2025 tax year, any increases to the assessed value of Class II and Class III real property will be capped at a rate of seven percent per year. Fair market and current use valuations are not affected by this legislation.

There are exceptions to the cap. The most common exceptions are:

1.   Unassessed property (e.g., constructing a new building).

2.   Additions or improvements to existing property (e.g., adding a garage to a house).

3.   Ordinary maintenance and repairs will not remove the cap.

4.   Change in tax class.

5.   Change in ownership. Spouse and family ownership changes will not remove the cap.

For a more complete explanation of the cap rate and exceptions, see the Alabama Department of Revenue's website.