CHELSEA — A new property tax cap law will protect owners from getting “gouged” through reappraisals, according to Lt Gov. Will Ainsworth.
House Bill 73 (HB73) by State Rep. Phillip Pettus (R-Killen) and State Sen. David Sessions (R-Grand Bay) capped annual property tax increases after a reappraisal. The legislation was amended several times on the House floor, bringing the maximum increase cap to 7%.
Governor Kay Ivey signed the bill into law in May. It will go into effect on October 1.
“We put a cap on property taxes. It really just came from all of a sudden I started getting phone calls from people saying, ‘Hey, my property taxes are going up 20%, 30%, 40%.’ Had some even higher than that and I was like, ‘Whoa, how is this happening?’ With that we put a cap at 7% and we looked at different states that were doing that. Obviously, if it doesn’t go up, it’ll stay flat but if it goes up 20% that means it only goes up 7%. We don’t want anybody to get gouged is what we’re trying to prevent there,” Ainsworth told attendees of a Shelby County Republican Party meeting on Tuesday.
The law will sunset after three years, meaning the legislature would have to re-approve it to extend it past 2027.
Exceptions to the 7% cap include:
Real property that has never been assessed.
Additions or improvements to real property, including new construction, not including repairs to or ordinary maintenance of an existing structure or the grounds of the property.
Changes to the classification of the property.
Changes in ownership of the property, except for transfers between spouse or family members for no or nominal consideration, including upon death of the owner and transfers due to redemption after foreclosure of a mortgage, tax sale or tax lien.
Property located in a tax increment district.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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