Alabama Closing Costs for Sellers in 2026: Transfer Tax, Fees and Real Numbers
Alabama charges a deed tax of $0.50 per $500 of value, not a percentage transfer tax. See the math on a $300,000 sale and what investors should budget.
Alabama has no percentage-based transfer tax. It charges a deed tax of $0.50 per $500 of value, or fraction of $500, under Code of Alabama Sections 40-22-1 through 40-22-12. On a $300,000 sale that is $300. The state does not say who pays, so your purchase contract decides, along with commission and the payoff.
What an Alabama seller pays at closing
Alabama is one of the simpler states for transfer costs. There is no percentage tax on the sale price. The state instead charges a flat deed tax per $500 block, and that tax is small next to commission and the mortgage payoff. The detail that trips people up is the rounding: any fraction of a $500 block is charged as a full block, so a price of $300,001 lands in the next block.
The Alabama Department of Revenue groups the deed tax and the mortgage tax under recordation tax. Both come from Sections 40-22-1 through 40-22-12 of the Code of Alabama 1975, and the department states that two-thirds of the revenue goes to the state General Fund and one-third to the county.
| Instrument | Rate |
|---|---|
| Deed (also bills of sale) | $0.50 per $500 of value or fraction thereof |
| Mortgage, deed of trust, conditional sale contract | $0.15 per $100 of indebtedness or fraction thereof |
Who pays
The Department of Revenue page lists the rates but does not say whether the buyer or the seller pays them. Treat it as a contract term. Your purchase agreement should state who covers the deed tax, and your title company or closing attorney can tell you what is customary locally. If you are the seller, read that clause before you set your net proceeds. If you are an investor writing offers, state the deed tax allocation in the contract so it is not a surprise at the table.
A worked example on a hypothetical $300,000 sale
Take a hypothetical $300,000 sale price.
- $300,000 divided by $500 is 600 blocks.
- 600 blocks at $0.50 each is $300 of deed tax.
The rounding rule matters at the margin. At $300,001, the fraction pushes the count to 601 blocks, which is $300.50. The difference is trivial on one deed, but it explains why a calculator and your title company’s figure can differ by a few cents.
The mortgage tax applies to the loan, not to you as the seller. On a hypothetical $240,000 loan, that is 2,400 units of $100 at $0.15, or $360. It is mostly a buyer-side cost, but it shows up in an investor’s own purchase whenever a lender is involved.
| Line | Math | Amount |
|---|---|---|
| Deed tax on $300,000 | 600 x $0.50 | $300 |
| Mortgage tax on a $240,000 loan | 2,400 x $0.15 | $360 |
The other seller costs
The deed tax is one of the smaller pieces of most Alabama closings. The rest of your net depends on items the state does not set for you:
- Agent commission. Negotiable, and usually the largest cost on a listed sale.
- Mortgage payoff. Your remaining balance plus interest through the payoff date.
- Prorated property taxes. Settled between buyer and seller as of the closing date, under your contract. The tax proration calculator gives a quick estimate.
- Title, settlement and recording fees. These vary by title company and county, so ask for a written estimate. The Department of Revenue page does not list a county recording fee, so get that figure from the county.
Why investors care
For a flipper, the cost shows up twice: once when you buy and again when you sell. On a hypothetical $240,000 purchase and $300,000 resale, the deed tax math is $240 plus $300, or $540, if you carry the full amount on both ends. That is modest, but it is one more line that belongs in the spreadsheet next to the title and recording costs that come with each closing.
The structure of a wholesale deal changes the count. An assignment moves the contract to your end buyer, so the closing is between the original seller and that buyer. A double close means two closings and two sets of costs: you buy, then you resell, and the deed tax is calculated on two different prices. If your fee is $15,000 and the double close adds $540 of deed tax plus a second round of title and recording charges, those costs come straight out of the fee. Ask your closing attorney how the consideration is reported on the deed in each structure.
For your maximum allowable offer, work backward from the resale price and subtract the deed tax and fees on both ends, along with rehab, holding costs and your target profit. Entering the deed tax as a line item, rather than rounding it away, keeps the offer honest on thin deals.
Check your numbers
Confirm every figure with your title company or closing attorney, since county recording fees and contract terms vary. For a quick estimate, the closing cost calculator in Automize CRM lets you enter your own sale price and fees.
This is general information, not legal or tax advice.
Sources
Rates checked October 24, 2026. General information, not tax or legal advice.
Common questions
What is the Alabama deed tax rate?
The Alabama Department of Revenue lists the deed tax at $0.50 per $500 of value or fraction thereof, which also covers bills of sale. The authority is Sections 40-22-1 through 40-22-12 of the Code of Alabama 1975. Two-thirds of the revenue goes to the state General Fund and one-third to the county.
Who pays the deed tax in Alabama?
The Alabama Department of Revenue page does not say whether the buyer or seller pays. That makes it a contract term. Check the payment clause in your purchase agreement, and ask your title company or closing attorney what is customary in your county.
Is there a tax when a buyer takes out a mortgage in Alabama?
Yes. The Department of Revenue lists a mortgage recording tax of $0.15 per $100 of indebtedness or fraction thereof, which also covers deeds of trust. It is tied to the loan, so it matters most for investors financing a purchase.
Does a double close cost more in Alabama?
A double close records two deeds, so the deed tax is calculated twice, once on each sale price, along with two sets of closing and recording costs. Ask your closing attorney what consideration is reported on the deed in an assignment compared with a double close.
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