HB475 Alabama 2025 Session

Summary

Primary Sponsor

Ernie YarbroughRepresentative

Republican

Session

2025 Regular Session

Title

Relating to Property Tax; amending the cap on the assessed value of real property

Summary

HB475 would change the cap on yearly increases to real property assessments for Class II and III properties, using a CPI-based formula (along with a seven percent limit) and applying retroactively to 2024.

What This Bill Does

After each county-wide reappraisal, the tax assessor must compare the current assessed value to the prior year and adjust if increases occur under the new rules. For Class II and Class III properties, annual increases in assessed value would be limited by a cap described in the bill, tied to a seven percent limit and the Consumer Price Index increase for the preceding year. Several changes to property value would not be counted under the cap, including additions or improvements, changes in ownership under certain transfers, and property located in tax increment districts; also, real property that has never been assessed is exempt. The act becomes effective October 1, 2025 and applies retroactively to October 1, 2024.

Who It Affects

• Property owners of real property classified as Class II or Class III, who would experience annual cap-limited increases in assessed value after reappraisals.
• Property owners making additions/improvements, undergoing changes in ownership (under specified transfers), or whose property is located in a tax increment district, who may be exempt from the cap for those particular changes.

Key Provisions

• Amends Section 40-7-2.2 to require annual comparison of new assessed values to prior-year values after county-wide reappraisals and adjust values under the new rules.
• Sets a cap on annual increases for Class II and Class III properties, capped by a limit described in the bill (involving a seven percent threshold and the prior year's CPI increase for the preceding year).
• Lists exemptions from the cap: real property never assessed; additions or improvements; changes in classification; changes in ownership under specific transfers (including transfers between spouses or family members for nominal consideration and certain foreclosures or tax-related transfers); and property in a tax increment district.
• States the act becomes effective October 1, 2025 and applies retroactively to October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue