The Alabama Department of Revenue announced this week changes that affect veterans who claim disability homestead exemptions on their primary residences.
Effective October 1, 2026 under Alabama Act 2026-268, veterans who have received a 100 percent permanent and total disability rating from the U.S. Department of Veterans Affairs may be issued a Tentative Certificate of Permanent and Total Disability prior to purchasing a homestead property. When presented with a tentative certificate, settlement agents and loan closing officers are prevented from considering ad valorem taxes when calculating the debt-to-income ratio of these veterans.
Any veteran wishing to apply for a disability homestead exemption (effective for the applicable tax year) prior to closing will complete a Taxpayer’s Affidavit for Tentative Certificate of Permanent and Total Disability and submit it to the local taxing official, along with a copy of the home purchase agreement and documentation of the veteran’s 100% disability.
The respective county taxing official will issue a qualifying veteran a Tentative Certificate of Permanent and Total Disability (form provided by ALDOR) within 20 days of receiving from the veteran all the information required by the act, to include the following:
1. A completed and signed affidavit (form provided by ALDOR)
2. The purchase agreement for the potential homestead
3. Documentation from the U.S. Department of Veterans Affairs indicating that the veteran has a 100 percent service-connected, permanent, and total disability
Upon purchase of the potential homestead by a veteran, a Tentative Certificate of Permanent and Total Disability is considered a valid Certificate of Permanent and Total Disability, pursuant to Sections 40-9-19 and 40-9-21, Code of Ala. 1975. However, the veteran is still required to formally request the homestead exemption once they purchase the home.
It is important to note that the homestead eligibility requirements for Sections 40-9-19 and 40-9-21, Code of Ala. 1975, have not been changed by this act.