On Thursday, Governor Kay Ivey and state lawmakers gathered for a ceremonial bill signing of legislation capping property tax increases passed earlier this year. The new law will cap the amount that property taxes can increase every year after reappraisals. The law establishes a maximum annual increase of 7%. 

“This law will help people keep more of their money by reducing the rate of property tax increases. With the high inflation that families and businesses are dealing with, this law will help to make owning a home or business more affordable for the people of Alabama,” said State Rep. Phillip Pettus (R-Killeen), the bill’s sponsor.

“In some areas, annual reappraisals have resulted in outrageous property taxes increases, sometimes by as much as 68% year-to-year, which can be financially crippling to homeowners and business owners alike,” Pettus said. “Capping annual increases at 7% allows cities and counties to acknowledge the rising value of property while, at the same time, shielding both families and employers from unfair and unexpected property tax increases.”

The bill was carried in the State Senate by Sen. David Sessions (R-Grand Bay)

RELATED: Alabama lawmakers cap property tax increases at 7% for reappraisals

Alabama Speaker of the House Nathaniel Ledbetter praised the measure when it passed his chamber: “Last year, property taxes in my district increased by as much as 40% due to reappraisals. This statewide trend is taxing Alabama families out of homeownership, and I’m proud that the Legislature came together and capped yearly increases at 7%,” Ledbetter said in May.

Previously, there was no limit in Alabama on increases in assessed values of property, which are set by tax assessors each year based on market data and the condition of properties. The law applies to Class III properties, which include single-family homes and agricultural land and forests, and Class II properties, which include commercial and business properties.

Effective October 1, 2024, Alabama residents will see the first impact of the new law when they pay property taxes in 2025.

Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on Twitter @Grayson270