Montgomery, AL asked in Tax Law for Alabama

Q: Do you have to pay property taxes on a house that is paid for completely, whether you live there or not?

If someone does not live on a property, but they are exempt from property taxes because of their age, do they still have to pay taxes on the property once they leave? They are not planning to sell the property. It may stay vacant or tenants may live there, but they do not plan to sell it.

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James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: In Alabama, property taxes are typically due on all properties, regardless of whether they are fully paid off or whether the owner lives in them. However, there are certain exemptions based on age, disability, and income level that can reduce or eliminate the property tax liability for eligible individuals.

If someone qualifies for a property tax exemption due to their age, they need to be aware that the terms of the exemption might change if they no longer reside in the property. For instance, if the property becomes a rental or remains vacant, the conditions that allowed for the exemption might no longer apply, and property taxes may become due.

It's important to check the specific rules in your county, as property tax laws and exemptions can vary within the state. The local tax assessor's office can provide detailed information about eligibility for exemptions and how they apply if the property's use or the owner's residency status changes.

If the property owner plans to have tenants or leave the property vacant, they should consider how this will affect their tax situation. Consulting with a tax professional or attorney can provide clarity and ensure compliance with all relevant tax laws. Remember, staying informed and proactive about property taxes can prevent unexpected liabilities and penalties.

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