Palms Realty
CLOSING COSTS

Alabama deed tax, mortgage tax and recording fees

Alabama collects two taxes when a sale is recorded. Here is how each is figured, with examples at the Birmingham-area median price.

The two recording taxes

  • Deed tax: $0.50 for each $500 of value, or fraction of $500 (Code of Ala. 40-22-1). Only the value above a mortgage on which mortgage tax was paid is taxed.
  • Mortgage tax: $0.15 for each $100 of the debt, or fraction of $100 (Code of Ala. 40-22-2).

Both are paid to the probate judge when the documents are recorded.

Worked examples at $329,950

  • All cash: 660 units of $500, so $330 of deed tax and no mortgage tax.
  • $264,000 loan: mortgage tax is 2,640 units of $100, or $396. Deed tax applies to the remaining $65,950: 132 units of $500, or $66. Total $462.

$329,950 is the Birmingham-area median sale price for August 2026 from the Alabama Center for Real Estate.

Jefferson County recording fees

Jefferson County Probate charges $16 for the first page and $3 for each additional page on most documents, plus $1 for each grantor or grantee beyond two. A mortgage satisfaction is $16.

After closing: property tax and homestead

Owner-occupied homes are assessed at 10% of market value. In Jefferson County, tax notices go out October 1 and are due by December 31. Claim the homestead exemption by December 31 for the next tax year: the State credits the first $4,000 of assessed value and the county the first $2,000. Owners 65 and older or disabled may qualify for more; see the Department of Revenue's homestead page.

Who pays what

Alabama law sets the taxes; your purchase contract decides who pays them. Before you sign, ask for an estimated closing statement. See our first-time buyer guide and selling guide.

Sources

This page is general information, not legal or tax advice. Program terms, fees and rules change; confirm current terms with the source linked above, your lender and your attorney. Updated October 30, 2026.

Ask for an estimated closing statement