Senate Bill 130 Alabama 2026 Session

Summary

Primary Sponsor

Chris ElliottSenator

Republican

Session

2026 Regular Session

Title

Taxation and Revenue; Homestead ad valorum taxes of certain veterans prohibited from inclusion in debt-to-income ratio under certain circumstances

Summary

SB130 would allow a 100% disabled veteran to obtain a tentative exemption certificate for homestead ad valorem taxes before buying a home, and bar lenders from counting those taxes in debt-to-income calculations when the certificate is provided.

What This Bill Does

A tax assessing official would issue a tentative certificate of permanent and total disability within 20 days after a 100% disabled veteran submits the required information (an affidavit with veteran and spouse details, whether the homestead will be jointly owned, an attestation that the home is the veteran's principal residence, the purchase agreement, and VA disability documentation). This tentative certificate would be treated as a valid certificate for the exemption when the veteran purchases a homestead. Settlement agents and loan closing officers would not count the ad valorem taxes on the homestead in the veteran's debt-to-income ratio if the veteran provides the tentative certificate. The Department of Revenue would establish the form of the tentative certificate and include the amount of ad valorem taxes exempted, with the act becoming effective October 1, 2026.

Who It Affects

• 100% disabled veterans who plan to purchase a homestead in Alabama and qualify for the exemption, receiving a tentative certificate for tax relief.
• Settlement agents and loan closing officers who must exclude ad valorem taxes from the debt-to-income ratio calculations for borrowers with a tentative certificate.

Key Provisions

• Issuance timeline and required information for the tentative certificate (affidavit, spouse info, ownership status, principal residence, purchase agreement, VA documentation).
• Tentative certificate is treated as a valid exemption certificate upon homestead purchase.
• Prohibition on considering ad valorem taxes in debt-to-income calculations when the veteran provides a tentative certificate.
• Department of Revenue to establish the certificate form and show exempt tax amount; effective date of October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue