Property Tax Exemptions You're Probably Not Claiming in Alabama

Alabama's homestead relief for seniors isn't a single exemption. It's three tiers that escalate based on your age, income, and disability status, and most homeowners only ever claim the smallest one without realizing a bigger benefit might apply. There's also a full exemption for permanently disabled veterans that comes with a catch worth knowing about if you're a surviving spouse.

The baseline every senior gets, and the two tiers above it

Every Alabama homeowner 65 or older receives the H4 exemption automatically eligible tier: full exemption from state property tax, plus the first $2,000 of county assessed value, with no income test at all. That's the floor. If you're legally blind, or 65 or older with combined income at $12,000 or less, or retired due to a permanent and total disability at any age, H2 goes further, removing $5,000 of county assessed value instead of $2,000. And if you're 65 or older with income at or below that same $12,000 threshold, or permanently and totally disabled at any age regardless of income, H3 goes all the way: a full exemption from both state and county property tax. These aren't separate, unrelated programs. They escalate, and a lot of homeowners who'd qualify for H2 or H3 are sitting on H4 simply because nobody walked them through the difference. All three require renewal with your county Revenue Commissioner by December 31 each year.

The full exemption for disabled veterans, and who it doesn't automatically cover

A veteran with a 100% permanent and total service-connected disability rating generally qualifies for the same full state-and-county exemption as H3, covering the home and up to 160 acres. Starting October 1, 2026, a new law removes the annual re-verification requirement specifically for these veterans, so they won't need to re-mail proof of disability every year the way H2 and H3 recipients otherwise do. Here's the part worth knowing if you're a spouse: this exemption is tied to the veteran personally and ends immediately when they pass away. It does not automatically continue for a surviving spouse. If you're a surviving spouse, you can still potentially receive the same full exemption, but only by qualifying under H3's own terms in your own right, either by being 65 or older with income at or below $12,000, or by being permanently and totally disabled yourself. Dependency and Indemnity Compensation doesn't count as taxable income for that $12,000 test, which works in a surviving spouse's favor.

What to actually check

Ask your county Revenue Commissioner which tier, H2, H3, or H4, actually applies to your specific age, income, and disability situation; don't assume the basic senior exemption is the best you can get. Renew by December 31 every year unless you're a disabled veteran benefiting from the new automatic continuation starting late 2026. And if you're the surviving spouse of a 100% disabled veteran, confirm your own eligibility under H3 rather than assuming the exemption carried over automatically.