Alabama's Over-65 Property Tax Exemption — The Version That's Actually True

You'll read everywhere that Alabama seniors pay no property tax. For most people relocating to a 55+ home in Huntsville, that's flatly wrong. Here's what the exemption really does.

How the exemption is actually layered

Alabama property tax is levied in three layers — state, county, and school/municipal. The over-65 relief peels them off in stages, and your income determines how many layers come off:

The state portion is just 6.5 mills out of a total that runs roughly 33–69 mills depending on your jurisdiction. So for a typical relocating retiree above that income floor, the over-65 "exemption" knocks only a small slice off the bill. The income threshold is low enough — and measured against taxable income on your most recent return — that a couple with a normal pension/401(k)/Social Security mix will rarely qualify for the full exemption.

What you'll actually pay (homesteaded, age aside)

Using current local millage and the standard homestead exemption, here's the annual property tax per $100,000 of market value by jurisdiction:

So a $325,000 home in the city of Huntsville runs roughly $1,885/year homesteaded; the same home in unincorporated Madison County runs closer to $1,100–$1,190. The over-65 state-portion waiver trims a bit more. See the full county-by-county breakdown in Madison vs. Limestone County.

Two details worth knowing

Exemptions aren't automatic — you have to claim them

Alabama homestead and senior exemptions must be applied for at the county assessor; they don't attach by themselves when you buy. Madison County's filing window runs October 1–December 31, and you'll need proof of age and (for the income-tested tiers) a copy of your most recent tax return or an IRS non-filing letter. Budget your first-year tax from the unexempted figure until your claim is on file.

The second-home exemption protects snowbirds

If Huntsville becomes a second home rather than your primary residence, Alabama's second-home exemption keeps it in the 10%-assessment class (instead of the 20% non-owner-occupied class), as long as it isn't rented out and you keep utilities and insurance in your name. That keeps a part-time Alabama home from being taxed at double the rate.

Bottom line

Don't buy in Huntsville because you think property tax vanishes at 65 — it doesn't. Buy because Alabama's base property tax is the lowest in the country whether you're 45 or 75. The senior exemption is a small bonus on top, not the headline.

Get your exact Huntsville property tax estimate

Verified against the Alabama Department of Revenue ("I am over 65 — do I have to pay property taxes?"), Alabama Administrative Code 810-4-1-.23, and the Madison County Tax Assessor's homestead and "Ways to Save" pages (income limit stated as $12,000) for the 2025 tax year. Income-test thresholds and the federal- vs. state-return criteria vary by exemption tier (H-2/H-3/H-4); confirm your specific eligibility with the county revenue commissioner before relying on these figures.