Buying a lake home in Houston should feel exciting, not confusing. Property taxes are part of the picture, and a little clarity goes a long way when you are comparing Smith Lake waterfront options or planning your budget. In this guide, you will learn how taxes are calculated in Alabama, what is typical in Winston County, the 7% cap on taxable value increases, and the key exemptions you might claim. Let’s dive in.
How Alabama property taxes work
Alabama calculates property tax in a few steps. For most owner‑occupied homes, your property is Class III and the county assesses 10% of market value as your assessed value. You then subtract any homestead exemptions before applying local millage.
A mill is the way local rates are expressed. One mill equals one dollar of tax per 1,000 dollars of assessed value, and the total tax is the sum of county, city, school, and any special district mills you pay. You can review a plain‑English explanation of mills in the Baldwin County tax FAQ, which applies statewide concepts for mills and calculations (Baldwin County FAQ).
Example calculation
- Step 1: Market value set by the assessor (example only): $200,000.
- Step 2: Class III assessment at 10% gives an assessed value of $20,000 (Alabama DOR HB73 overview).
- Step 3: Subtract homestead exemptions, such as the basic state homestead, to get net taxable assessed value (Homestead exemptions overview).
- Step 4: Multiply by the total millage. If the total were 30 mills, tax = net assessed value × 0.030.
What to expect in Winston County
Winston County’s property taxes are modest compared with many places in the state. The Tax Foundation lists an effective property tax rate around 0.3285% and a median annual tax near $363 for the county. These are helpful benchmarks for planning, but your bill will vary based on your home’s market value and local mills, especially for larger parcels or waterfront properties (Tax Foundation county data).
Local school millage can change when voters renew or adjust school levies, which affects the total mills you pay. Recent local reporting shows school millage renewals are periodically on the ballot (millage renewal context). For parcel‑specific taxes, current mills, or billing questions, contact the Winston County Revenue Commissioner through the Alabama Department of Revenue’s county office directory (Winston County contact listing).
The 7% cap on taxable value increases
A new Alabama law, Act 2024‑344 (HB73), limits how much your taxable assessed value can increase each year for many Class II and Class III properties. The cap is 7% per year on the taxable assessed value, even if market values rise faster. This can create a gap between the assessor’s current market value and the capped taxable value, which helps explain why some value changes do not immediately change your bill.
The cap does not stop the assessor from setting market value or hearing appeals. It affects how the taxable portion is calculated after exemptions are applied. For details and timing, review the Alabama Department of Revenue’s guidance on the 7% cap (HB73 guidance).
Homestead exemptions you may claim
Homestead exemptions reduce your assessed value before mills are applied. Alabama offers several principal‑residence exemptions with different eligibility thresholds and amounts. The basic homestead provides a fixed dollar reduction for non‑senior homeowners, and counties may also offer a county‑level reduction.
Additional relief exists for homeowners who are age 65 and older, those who are permanently and totally disabled, or those who are blind. Some of these exemptions can remove the state portion and part or all of the county portion of ad valorem tax, depending on income and other criteria. Review the eligibility categories and documentation requirements on the Department of Revenue’s homestead page (Homestead exemptions overview).
How to apply in Winston County
File your homestead application with the Winston County Revenue Commissioner. Be ready to show that the property is your principal residence as of the first day of the tax year, along with any income or disability documentation required for senior or disability‑based exemptions. Use the state’s county office directory to confirm local steps and deadlines (Winston County contact listing).
Key dates, bills, and payment
Alabama property taxes are due and payable October 1 each year and are considered delinquent after December 31. That calendar affects escrow planning, proration at closing, and any end‑of‑year payments you plan to make (Alabama DOR HB73 overview). Payment methods and timelines vary by county, so confirm instructions with the Winston County revenue office.
If taxes go unpaid, a lien is created and the county may sell the tax lien. Owners generally have a redemption period, often up to three years for liens sold to private purchasers, and must pay statutory interest and costs to redeem. Procedures and timelines depend on the type of sale and probate processes, so contact the county immediately if you are behind, and review a plain‑language overview of Alabama tax lien sales and redemption for context (Alabama tax sale and redemption overview).
How to appeal your assessed value
If you disagree with your property’s market value, you can file a written protest with the County Board of Equalization. You typically have 30 days from the date you receive a valuation notice to file, and the county will schedule a hearing. This appeal addresses market value, not the 7% cap, which only limits how taxable value can rise from year to year.
The Alabama Department of Revenue explains the protest window and process in its FAQs. Start by reviewing your notice and contacting the Winston County office for local filing procedures (DOR protest FAQ).
Buying or selling a Houston lake home
At closing, taxes are usually prorated between buyer and seller based on the closing date. If the current year bill is not out, prorations are often estimated and then adjusted later by agreement on the closing statement. You can see a typical contract approach to tax prorations in this sample document used in Alabama transactions (proration example).
Before you close, ask your title company or attorney to verify the tax status and any liens. It is also smart to look up the parcel in the Winston County system or call the revenue office to confirm the most recent bills and payments (Winston County contact listing).
Quick checklist for Houston lake homeowners
- Confirm your property class and that your assessment uses the 10% Class III rate.
- Check your current total mills and any school renewals that affect your bill.
- File homestead exemptions as soon as you occupy your principal residence.
- Note the 7% taxable value cap and how it may affect annual increases.
- Mark dates: due October 1, delinquent after December 31.
- If you receive a valuation notice, calendar the 30‑day protest window.
- During a purchase or sale, verify taxes are current and prorations are accurate.
Ready to talk through your specific lake home or land purchase on Smith Lake? For concierge guidance tailored to Houston and Winston County, connect with Macy Hinds Teer for a clear plan and local insight.
FAQs
When are Alabama property taxes due for Winston County homes?
- Taxes are due October 1 and become delinquent after December 31 for the tax year (Alabama DOR).
How do mills affect my lake home tax bill?
- Your tax equals the net assessed value after exemptions multiplied by the combined local mills, where one mill equals one dollar per 1,000 dollars of assessed value (Baldwin County FAQ).
What is the 7% cap on taxable value increases in Alabama?
- For many Class II and Class III properties, annual increases to taxable assessed value are capped at 7%, which can limit how fast your tax bill rises even if market value jumps (HB73 guidance).
Which homestead exemptions can a Houston homeowner claim?
- Alabama offers a basic homestead reduction and expanded exemptions for qualifying seniors, permanently and totally disabled homeowners, and the blind; eligibility and amounts vary, and you apply through the county (Homestead exemptions overview).
What happens if I do not pay my Winston County property taxes?
- Unpaid taxes become a lien and may be sold at a tax sale, and owners generally have up to three years to redeem if sold to a private purchaser by paying statutory interest and costs; contact the county promptly for options (Tax sale and redemption overview).
