Bill > HB397

This bill amends Alabama law to increase the adjusted cap for homestead exemptions, which are tax exemptions for a person's primary residence, and allows the unremarried widow or widower of certain individuals to claim this exemption. Specifically, the bill raises the maximum assessed value for certain homestead exemptions from $2,000 to $4,000 and from $4,000 to $5,000 in different provisions, while maintaining the 160-acre limit. It also expands eligibility for the homestead exemption to include the unremarried surviving spouse of a deceased individual who was eligible for the exemption, provided the surviving spouse's name is on the property deed and their annual adjusted gross income does not exceed $150,000. The bill also updates income thresholds for certain age-related exemptions and clarifies definitions for permanent and total disability. These changes are set to take effect for tax years beginning on or after January 1, 2027, with the act itself becoming law on June 1, 2026, and the Department of Revenue authorized to adopt necessary rules.

Budget and Finance

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