House Bill 167 Alabama 2026 Session

Summary

Primary Sponsor

Jamie KielRepresentative

Republican

Session

2026 Regular Session

Title

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

Summary

HB167 would replace the current 7% cap on annual increases in real property assessments with a CPI-based cap for Class II and III properties, including several exemptions and retroactive timing.

What This Bill Does

It limits how much the assessed value of Class II and Class III real property can increase each year by the prior year’s CPI-U (urban consumers) increase, not exceeding a 7% threshold. It also lists exemptions where the cap does not apply, such as new construction, additions or improvements, changes in classification, certain transfers of ownership, and property located in tax increment districts. The changes apply after each county reappraisal and have retroactive effect to October 1, 2024, with the act becoming effective October 1, 2026.

Who It Affects

• Owners of Class II and Class III real property, whose annual assessment increases would be limited by the CPI-based cap.
• Property owners making additions or improvements, changing classification, transferring ownership under certain conditions, or owning property in tax increment districts, who are exempt from the cap.
• Property that has never been assessed, as well as properties undergoing new construction or significant additions, which are not subject to the cap.

Key Provisions

• After each county-wide reappraisal, the assessor compares the new assessed value to the prior year and adjusts the value if it increased.
• For Class III properties, annual increases in assessed value are limited to the lesser of the prior year’s CPI-U increase or 7%.
• For Class II properties, annual increases in assessed value are limited to the lesser of the prior year’s CPI-U increase or 7%.
• Exemptions from the cap include properties never assessed; additions/improvements/new construction; changes in property classification; certain transfers of ownership (spouse/family transfers, foreclosure/redemption or tax-sale transfers); and property in a tax increment district.
• Effective dates: the limitations apply starting October 1, 2024 and continue through the fiscal year beginning October 1, 2027; the act becomes effective October 1, 2026 and applies retroactively to October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 11, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue