Worried about surprise taxes at closing in Jasper? You’re not alone. Deed and mortgage taxes can look like alphabet soup on a closing disclosure, especially if you’re buying or selling a home or land near Smith Lake. In this guide, you’ll learn what these taxes are, how they’re calculated in Alabama, and what to expect in Walker County. Let’s dive in.
Deed and mortgage taxes, in plain English
Deed tax applies to the value transferred when a property changes hands. Mortgage tax applies to the amount of a loan that gets recorded. These are two separate state taxes collected when documents are recorded.
Both taxes show up as distinct line items on your closing statement. The revenue is split between the state and county, so you’ll see them paired with local recording fees. You can verify the official state rules on the Alabama Department of Revenue’s page on recordation taxes.
Alabama tax rates at a glance
- Deed (conveyance) tax: about $0.50 per $500 of value, which equals $1 per $1,000, calculated in $500 increments. See Alabama’s recordation tax overview.
- Mortgage (indebtedness) tax: $0.15 per $100 of the loan amount, calculated in $100 increments. Review the state guidance here.
These rates are set by state law and apply statewide, including Jasper. Counties collect them at recording and add their own per-page and processing fees.
How Jasper calculates and rounds
Alabama counties apply rounding rules when they compute the taxes. Deed tax is calculated in $500 value increments. Mortgage tax is calculated in $100 loan increments. You can see examples of how counties explain these increments on county recording pages, such as Montgomery County’s recording guidance.
A quick example
Say you buy at $250,000 with a $200,000 mortgage that records at closing:
- Mortgage tax: $200,000 divided by $100 equals 2,000, times $0.15 equals $300.
- Deed tax: Value taxed may be the equity portion. $50,000 divided by $500 equals 100, times $0.50 equals $50.
- Estimated total recordation taxes: about $350, plus local recording fees. State rates explained here.
Your final numbers can vary based on exact rounding, page counts, and county fees. Your closing attorney or title company will confirm the precise totals.
When deed and mortgage record together
If the deed and mortgage are recorded at the same time, many Alabama counties compute mortgage tax on the full loan and deed tax on the equity portion. Some counties process the deed at zero taxable value if the mortgage equals or exceeds the price. Always confirm the exact Walker County process with your closing agent. You can see a typical county explanation of simultaneous recording on Baldwin County’s recording page.
Who usually pays in Alabama
Custom often guides who pays which tax, but it is always negotiable. In many Alabama deals, sellers typically pay the deed tax, while buyers pay mortgage and loan-related costs. Your purchase contract can assign costs differently, so get it in writing and review the closing disclosure. For a consumer overview of how costs are commonly split, see this Alabama closing cost summary.
Local Walker County fees you may see
Beyond state taxes, Walker County adds local charges. These can include per-page recording fees, a small processing or clocking fee, and other local add-ons authorized by law. Fee amounts can change, and page counts affect totals.
Before you close, call or have your title company call the Walker County Probate Office in Jasper to confirm today’s schedule and any e-recording options. Use the Walker County Probate contact page. For a snapshot of common Walker County line items used by filing services, see this county fee summary, then verify with the Probate Office.
Special rules to know
- Nonresident seller withholding: Alabama requires income-tax withholding on sales by nonresident sellers unless an exemption applies. The rate is generally 3 or 4 percent and is separate from recordation taxes. Start early if you are an out-of-state seller. Review the state’s nonresident withholding guidance.
- Price validation at recording: Counties require documentation of the purchase price or a validation form when recording a deed. This helps ensure accurate deed tax calculation. See a county example of the validation requirement in this recording guidance.
Checklist for a smooth Jasper closing
- Get an estimate early: Ask your title company for a draft settlement statement with deed tax, mortgage tax, and Walker County fees. Confirm who pays each item in your contract. Use the state recordation tax page to sanity-check rates.
- Share accurate figures: Provide final sale price and loan amounts so taxes are calculated with the correct rounding and any simultaneous recording rules.
- If selling from out of state: Review nonresident withholding and needed forms well before closing.
- Verify local fees: Have your agent or closing attorney confirm the current Walker County fee schedule with the Probate Office.
- Review the final disclosure: Check deed tax, mortgage tax, per-page charges, and processing fees at least a few days before signing.
Ready to move with confidence?
When you understand deed and mortgage taxes, you can plan your net proceeds as a seller or your cash-to-close as a buyer. If you are buying or selling in Jasper or around Smith Lake, we will help you coordinate with your title team, confirm fees, and keep your closing on track. Reach out to Chris & Dena Harris for clear answers and local guidance.
FAQs
What are deed and mortgage taxes in Alabama?
- Deed tax applies to the value transferred and mortgage tax applies to the loan amount. Both are collected at recording and follow state rates shown on the recordation tax page.
How are Alabama deed and mortgage taxes calculated and rounded?
- Deed tax uses $500 value increments and mortgage tax uses $100 loan increments; counties follow these rules when computing taxes at recording, as seen in county guidance.
Who typically pays these taxes at closing in Jasper?
- Sellers often cover deed tax and buyers cover loan costs, but your contract controls the final split; see this Alabama cost overview.
What happens if the deed and mortgage record at the same time?
- Many counties tax the full mortgage amount and then apply deed tax to the equity portion; confirm Walker County’s process with your title company and refer to county examples.
I’m selling but live out of state. Will Alabama withhold taxes?
- Possibly; nonresident sellers are subject to withholding unless they qualify for exemptions or adjustments. Review the state withholding rules early in the process.
