Categories
Moving to Huntsville, Relocation, Tips & Things to Know, buyer resourcesPublished August 25, 2026
Alabama Property Taxes Explained: What People Moving to Huntsville Need to Know
Quick answer: Alabama has some of the lowest property taxes in the country, and Madison County is no exception — a $400,000 home inside the City of Huntsville runs about $2,320 a year before homestead exemption. But the rate swings from 30 mills to 72 mills depending on your exact jurisdiction, and because both Huntsville and Madison straddle a county line, two houses on the same street can be taxed differently.
If you are moving from Texas, New Jersey, Illinois or almost anywhere in the Northeast, the number below is going to look like a typo. It is not.
How is Alabama property tax calculated?
Owner-occupied residential property is Class III, assessed at 10% of appraised value under Alabama Code § 40-8-1. Multiply your appraised value by 0.10, then apply the millage for your jurisdiction. That 10% assessment ratio is the reason Alabama bills look so low — most states assess at or near 100% of value.
The formula
Appraised value × 10% = assessed value. Assessed value × millage ÷ 1,000 = annual tax.
Or more simply: effective rate = mills × 0.10. A 58-mill jurisdiction is a 0.58% effective rate.
What are the property tax rates in Madison County?
| Jurisdiction | Mills | Effective rate | Annual on a $400K home |
|---|---|---|---|
| City of Madison | 69.5 | 0.695% | $2,780 |
| City of Huntsville | 58.0 | 0.580% | $2,320 |
| Triana | 61.5 | 0.615% | $2,460 |
| Gurley / Owens Cross Roads / New Hope | 40.5 | 0.405% | $1,620 |
| Unincorporated Madison County (improvements) | 36.5 | 0.365% | $1,460 |
| Unincorporated Madison County (land) | 33.5 | 0.335% | $1,340 |
And in Limestone County?
| Limestone County jurisdiction | Mills | Annual on a $400K home |
|---|---|---|
| City of Madison portion in Limestone Co. | 72.0 | $2,880 |
| Huntsville portion in Limestone Co. | 55.0 | $2,200 |
| Athens / Ardmore / Elkmont | 40.0 | $1,600 |
| Decatur | 38.6 | $1,544 |
| Lester / Mooresville | 35.0 | $1,400 |
| Unincorporated Limestone County | 30.0 | $1,200 |
The quirk that catches almost every relocating buyer
Both Huntsville and Madison straddle the Madison–Limestone county line, and the millage differs on each side — in opposite directions.
A Huntsville address in Limestone County pays 55 mills versus 58 in Madison County — you save about $120 a year on a $400,000 home. A City of Madison address in Limestone County pays 72 mills versus 69.5 in Madison County — you pay about $100 more.
Small in isolation. Worth knowing before you assume the two sides are identical, and worth checking on every single property you consider.
What is the homestead exemption worth?
| Type | Who qualifies | State exemption | County exemption |
|---|---|---|---|
| H-1 | Under 65, no income limit | $4,000 assessed value | $2,000 assessed value |
| H-2 | 65+ or disabled, income under $12,000 | Full | $5,000 |
| H-3 | 65+ with income $12,000 or less, or permanently and totally disabled | Full | Full |
| H-4 | 65+ with income over $12,000 | Full | $2,000 |
If you are retiring here, read the H-3 line again
H-3 is a complete property tax exemption for qualifying homeowners 65 and older with income at or below the threshold, or who are permanently and totally disabled.
Combined with Alabama not taxing military retirement, Survivor Benefit Plan annuities, CSRS or Social Security, this is one of the more favorable retirement tax pictures in the country. Confirm your own eligibility with the county — the income test uses specific definitions.
You must claim the homestead exemption; it is not automatic. File with your county tax office after you close. New residents routinely miss this in year one and overpay.
How does this compare to where I am coming from?
| Move | Median home price | Rough annual property tax |
|---|---|---|
| Washington, D.C. metro → Huntsville | ~$649,000 → $349,000 | More than halved |
| Colorado Springs → Huntsville | ~$457,000 → $349,000 | Substantially lower |
Selling at the Colorado Springs median and buying at the Madison County median frees up roughly $108,000 before costs. From the D.C. metro it is closer to $300,000 — and cuts the annual property tax bill by more than half.
What else should I know about Alabama taxes?
| Income type | Alabama treatment |
|---|---|
| Military retirement pay | Fully exempt |
| Survivor Benefit Plan annuities | Fully exempt |
| U.S. Civil Service Retirement System (CSRS) | Exempt |
| BAH, BAS and other quarters allowances | Exempt |
| Social Security | Fully exempt |
| Active duty base pay (Alabama legal residents) | Taxable |
| Federal income tax paid | Deductible on your Alabama return |
Two things relocation articles get wrong
Active duty base pay is taxable if you list Alabama as your home of record. The Department of Revenue is explicit about it.
FERS is not named in the exemption statute. The statute names the Civil Service Retirement System specifically. If you are a FERS annuitant, confirm with a CPA rather than assuming the CSRS exemption extends to you.
Frequently asked questions
How much are property taxes in Huntsville, Alabama?
A $400,000 home inside the City of Huntsville runs about $2,320 a year before homestead exemption, based on 58 mills and Alabama's 10% Class III assessment ratio. Unincorporated Madison County is closer to $1,460.
Why are Alabama property taxes so low?
Because owner-occupied homes are assessed at 10% of appraised value rather than at or near full value as in most states, and because millage rates are modest. The combination produces effective rates in the 0.3% to 0.7% range.
Does Alabama tax military retirement?
No. Military retirement pay and Survivor Benefit Plan annuities are fully exempt, as are BAH, CSRS and Social Security. Active duty base pay is taxable for Alabama residents.
Do I have to apply for the homestead exemption in Alabama?
Yes. It is not automatic. File with your county tax office after closing, or you will overpay in your first year.
Is it cheaper to live in Madison County or Limestone County?
On property tax, Limestone County is cheaper if you are unincorporated (30 mills versus 36.5) — but a City of Madison address is actually more expensive on the Limestone side (72 mills versus 69.5). Check the specific jurisdiction, not the county name.
Keep reading
Want your actual number before you write an offer?
Send me an address you are considering and I will tell you which county and jurisdiction it falls in, what the annual tax bill looks like before and after homestead, and how that compares to what you are paying now. It takes me about five minutes and it has changed more than one client's mind about which side of a street to buy on.
Ben Nemec · Associate Broker · Team Nemec at Capstone Realty
This post is general information, not tax, legal, financial or lending advice. Ben Nemec is a licensed Alabama real estate professional, not a CPA, attorney, lender or federal HR representative. Verify BAH at travel.dod.mil, GS pay at opm.gov, loan terms with a licensed lender, and gate hours with the official Redstone Arsenal access control page. Market figures reflect the sources and dates cited and will change. Team Nemec at Capstone Realty, Huntsville, Alabama. Equal Housing Opportunity.
Ben Nemec
Associate Broker | Team Leader | Team Nemec | Capstone Realty | PLACE
or another way