7% Cap

Notice About Assessment Valuation Cap

New legislation has created a limitation — or “cap” — on the assessed value for certain real property (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 7% per year. Fair market and current-use valuations are not affected by this legislation.

The most common exceptions to the cap include:

1. Unassessed property (for example, constructing a new building).
2. Additions or improvements to existing property (for example, adding a garage).
3. Ordinary maintenance and repairs (these do 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 complete explanation of the cap rate and exceptions, visit the Alabama Department of Revenue’s website .