Buying a Home in Alabama With a VA Disability Rating? Two New Property Tax Changes to Know

If you’re a veteran planning to buy a home around Birmingham, there are two recent Alabama changes worth discussing before you get too far into your search. Both took effect October 1, 2026, and both address property-tax paperwork for qualifying disabled veterans.

As the wife of a veteran, I pay attention to information that can help military families make more informed decisions. This is one of those updates where getting the right people involved early can make the purchase process easier to understand.

Here’s what changed, what still needs to happen, and the questions I would bring to your lender and county tax office.

1. Qualifying Buyers Can Get Property Tax Documentation Before Closing

Alabama Act 2026-268 creates a way for qualifying veterans to obtain a Tentative Certificate of Permanent and Total Disability before purchasing a primary residence.

The law addresses veterans with a 100% service-connected, permanent and total disability, supported by documentation from the U.S. Department of Veterans Affairs, who qualify for the applicable Alabama homestead exemption.

With that certificate provided, the law prohibits a settlement agent or loan closing officer from including the home’s ad valorem taxes in the borrower’s debt-to-income calculation.

In everyday language, debt-to-income is a comparison of monthly debt obligations with income. If you qualify for an exemption, this change provides a way to document that tax treatment during the purchase process.

That makes it a conversation to have early with your lender. It does not guarantee loan approval or mean you should increase your budget. Ask for an updated payment estimate and an explanation of how the certificate will be handled in your loan file.

You can read the enacted law here.

2. What You Need to Request the Certificate

The county taxing official needs three items:

• The completed and signed Alabama Department of Revenue affidavit.
• A purchase agreement for the home.
• VA documentation establishing the qualifying disability status.

The county official must issue the certificate within 20 days after receiving all required information. Since a purchase agreement is required, this is a step to coordinate once you’re under contract—not something to assume is finished during your first lender conversation.

You still need to formally request the homestead exemption after purchasing the home. The tentative certificate does not eliminate that step, and the law does not change the underlying homestead eligibility rules.

The Cullman County Revenue Commissioner’s explanation describes the statewide process. Submit your own request to the taxing official for the county where your property is located.

3. Annual Verification Has Changed for Qualifying Veteran Homeowners

The second change, Alabama Act 2026-598, removes annual exemption claims and eligibility verification after initial qualification for veterans whom the VA has determined to be permanently and totally disabled and who qualify under the specified homestead provisions.

That means less repeat paperwork for eligible homeowners. It does not remove the initial application.

The release from annual verification ends when the qualifying veteran dies or establishes a new homestead. If you sell your home and buy another, contact the county tax office about the new property rather than assuming the existing exemption follows you.

Read the enacted annual-verification law here.

Alabama Property Tax Benefits and VA Loan Benefits Are Separate

A VA loan and an Alabama homestead exemption have different eligibility rules. Being eligible for one does not automatically establish eligibility for the other.

There is also a separate federal benefit worth asking your lender about: borrowers receiving VA compensation for a service-connected disability generally do not have to pay the VA funding fee. That benefit does not require the same 100% permanent-and-total status discussed in the new Alabama certificate process.

The VA’s funding-fee guidance explains eligibility and other exemption categories. Have your lender confirm your status and estimated closing costs.

Buying Around Birmingham? Start With the Property’s County

Your home search may include Hoover, Helena, Pelham, Chelsea or other Birmingham-area communities. When it’s time to handle tax paperwork, start with the property’s actual county and parcel information.

Alabama defines a homestead as an owner-occupied single-family dwelling and associated land, up to 160 acres. Ownership, occupancy and the applicable tax year matter. The Alabama Department of Revenue directs homeowners to their local county office to apply.

Ask that office to confirm the filing deadline, the tax year your exemption will apply to, and how any existing tax bill should be handled. Ask your closing team how taxes will be prorated and your lender how escrow will be treated. Don’t simply remove taxes from an online calculator and assume the resulting payment is final.

For a broader explanation, see my Alabama homestead exemption guide.

Five Questions to Ask Before You Close

1. Does my VA documentation establish the status required for the tentative certificate?
2. Which county office handles the property, and how should I submit the affidavit?
3. Who will deliver the certificate to the lender and closing team?
4. What will my estimated payment and cash needed at closing look like after review?
5. What do I need to file after closing, and when will the exemption apply?

Keep the answers with your purchase paperwork. A short checklist is much easier to follow than trying to remember several conversations during a busy move.

Planning Your Next Home Purchase

The paperwork matters, but so does choosing a home that works for your everyday life. Your commute, layout, maintenance needs and comfortable monthly budget should all be part of the conversation.

If you’re buying around Birmingham, I can help you compare homes and coordinate these questions with your lender and closing team. Start with my Birmingham buyer’s guide, or contact me with your moving timeline and the areas you’re considering.

Information reviewed October 4, 2026. Eligibility and tax-year treatment should be confirmed with your county taxing official; loan qualification and payment estimates should be confirmed with your lender.