Alabama Real Estate Transfer Taxes: An In-Depth Guide (2024 Update)

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By Jon Stubbs Updated March 18, 2024


Who pays transfer taxes? | When are transfer taxes paid? | Methodology

Alabama's current transfer tax rate is $0.50 per $500. So, for a house worth $226,045 — the median home price in the state — the transfer tax due will be $226. Cities and counties within the state may charge an additional fee on top of the standard rate, which can cause your total dues to increase.

Exactly who pays the transfer tax in Alabama is negotiable, but usually the buyer is responsible.

Clever Real Estate can help you cut costs here — our concierge team will partner you with an experienced agent who can help you negotiate a good deal with your buyer on transfer taxes. Not to mention, you'll save big by paying only 1.5% in commission.

💰 Find an agent who can negotiate your transfer taxes

You can't change transfer tax rates. But, an experienced Clever Real Estate agent can help you win the negotiation battle so you aren't stuck paying all of the transfer taxes on your own.

When you choose Clever, you'll work with a full-service realtor with transfer tax expertise in your local market.

Clever's service is totally free, with zero obligation — you can walk away at any time.

Who pays transfer taxes in Alabama: The buyer or the seller?

In Alabama, usually, the buyer is responsible for paying the transfer tax.

In slow markets or in situations when a seller wants to sell their home quickly, a seller may agree to pay the transfer tax to secure a buyer.

How Much Are Transfer Taxes in Alabama?

If you're an Alabama buyer taking out a mortgage to finance your home purchase, you'll also have an additional mortgage recording fee of $0.15 per $100. In this case, expect to pay a total of 0.25% per $100 in taxes and recording fees.

In Alabama, The current tax rate is $0.50 per $500 or 0.10% of the home sale value. So, for the median home price of $226,045, the property transfer tax will be $226.

Can You Deduct Transfer Taxes?

Unlike property taxes, you cannot deduct real estate transfer taxes from your annual income taxes. However, the seller may be able to include this amount in the "cost basis" of the property, which can help defer capital gains taxes.

When you sell your home for more than what you paid for it, you could be subjected to paying capital gains tax. Capital gain is calculated by subtracting the sale price from the price it cost you to acquire the property. For example, if you purchased a home for $150,000 and sell it for $200,000, your capital gain would be $50,000. However, if you paid the $200 transfer tax instead of the buyer, your capital gain becomes $49,800 instead.

Most home sales in Alabama will have no capital gains to claim. Individuals can exempt the first $250,000 in profit, while married couples filing jointly can deduct the first $500,000 of their profit. With a median home value far below these levels, in most cases, you won't need to worry about deductions in the first place. In the rare instance that it does, the transfer tax deduction can come in handy.

When do you pay transfer taxes in Alabama?

Transfer taxes are paid at the closing of a deal, and in most cases are paid by the buyer.

Other Considerations

The good news for buyers and sellers is that neither party has to figure out real estate transfer taxes on their own. The closing attorney will calculate this amount for you and include it as part of the closing costs on the settlement sheet. The transfer tax must be paid at the time of the closing in order for the new homeowner to take possession.

That said, responsibilities for ambiguous tax payments can be complicated. Buyers and sellers alike can benefit from partnering with an experienced local real estate agent who can help them navigate the complexities of the real estate transfer tax and other closing costs in Alabama.

Clever can partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the state average of 2.75%! The money you'll save can more than offset the cost of the transfer taxes.

» SAVE: Learn more about how a Clever agent can help you navigate Alabama transfer taxes


  • Transfer tax amounts are based on government website information as of February 2024.
  • We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
  • Home values, list prices, and sale prices are based on Zillow data as of March 2024.

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