Alabama levies a state "Recordation Tax" (Code of Alabama § 40-22-1), which functions as the real estate deed transfer tax, at $0.50 per $500 of property value or fraction thereof (effectively ~0.1% of sale price). Example: on the state's ~$231,000 median home price, the tax is about $233. Two-thirds of the revenue goes to the state treasury and one-third to the county; it's collected by the county Probate Judge's office when the deed is recorded. Separately, Alabama also imposes a mortgage/deed-of-trust recording tax under § 40-22-2 of $0.15 per $100 of the loan amount (0.15%) — this is not the transfer tax itself but is a real additional recording cost on financed deals that should not be confused with (or omitted from) total closing-cost estimates. No widely-documented county- or city-level surtax stacked on top of the state recordation tax was found (unlike NYC/NY State or parts of CA/WA); some sources vaguely note localities "can" add fees, but this could not be confirmed with a specific, current example and should be verified against the specific county's probate office if precision matters.
Non-commission closing costs alone: roughly 2-5% of the purchase price for buyers, and roughly ~3% of sale price for sellers (transfer/recordation tax, recording fees, title and attorney fees). When real estate agent commissions are included (Alabama average commission cited around ~6%), total seller-side costs are commonly cited in the 6-10% of sale price range.
Who typically pays: By local custom (not statute — fully negotiable in the purchase contract): the seller customarily pays the state deed recordation/transfer tax, the owner's title insurance policy, and deed recording fees. The buyer customarily pays their own mortgage-related costs (including the separate mortgage recording tax on the loan amount), lender/loan origination fees, prepaid items (escrow, insurance, interest), and their own title-related lender costs. Alabama closings are typically attorney-conducted, and allocation of costs is set in the contract.
Two distinct Alabama recordation taxes exist and are easy to conflate: (1) deed/real property transfer tax at $0.50/$500 of value, and (2) mortgage recording tax at $0.15/$100 of loan amount — both from the Alabama Department of Revenue (revenue.alabama.gov/tax-types/recordation-tax/) and Code of Alabama Title 40, Ch. 22 (§40-22-1, §40-22-2). No confirmed county/city "mansion tax" or added local transfer-tax rate was found for Alabama in this pass; flag this as a soft/unconfirmed point rather than a hard fact. All commission and total-cost percentages above come from real-estate industry closing-cost calculators/blogs (ListWithClever, iBuyer, AnytimeEstimate, RealEstateWitch) rather than government sources, so treat them as market-typical estimates, not fixed or regulated figures.
Facts on this page reflect research current as of 2026-07-05. Programs, rates, and laws change — confirm current figures with the relevant state agency before relying on them.