Official fees
Alabama gift a car fee chart
Sales tax - spouse, parent/child, sibling
$0
must be documented as a gift
Sales tax - grandparent, grandchild, in-law, friend
2% state + local
on fair market value
Title application fee
$15.00
due either way
Registration + ad valorem
still due
unaffected by gift status
Figures verified July 2026 against official sources (listed below). Always confirm the final amount with your county probate judge or license commissioner's office (on behalf of ALDOR) - counties can add small local fees.
Official Alabama forms you'll need
- MVT 5-1EApplication for Certificate of Title
A gifted vehicle uses the standard title application (MVT 5-1E) completed through a designated agent, with the gift noted for the applicable tax exemption.
Get the current version of each form from your county probate judge or license commissioner's office (on behalf of ALDOR) before you file - agencies revise forms, and offices reject outdated ones.
Step by step
How to gift a car in Alabama
- 1
Confirm the relationship qualifies (spouse, parent/child including step-relations, or sibling).
- 2
Have the giver sign the title over, writing 'GIFT' where the sale price would normally go.
- 3
Both parties complete and sign Form MVT 5-1.
- 4
Recipient takes the title, Form MVT 5-1, and ID to the county probate office within 20 calendar days.
- 5
Pay the $15 title fee, registration, and ad valorem - no sales tax if the gift qualifies.
- Immediate family
- Tax-free
- Other relation/friend
- Taxed on FMV
- Required form
- MVT 5-1
- Title fee (either way)
- $15
- Deadline
- 20 days
Overview
Documentation is what makes the exemption stick: write 'GIFT' as the consideration on the bill of sale (never $0 or $1 - auditors read that as a taxable sale) and complete Form MVT 5-1, signed by both parties. Everything else about the transaction is unchanged - the $15 title fee, 20-day deadline, registration, and ad valorem tax all still apply whether it's a qualifying gift or not.
Same state, other costs
More Alabama vehicle costs
Common questions
Alabama gift a car FAQ
- Who counts as 'immediate family' for Alabama's gift tax exemption?
- Spouse, parent or child (including step- and adopted relationships), and sibling. Grandparents, grandchildren, aunts, uncles, cousins, in-laws, and unmarried partners do not qualify - those transfers are taxed as a sale on the vehicle's fair market value.
- Can I just write '$1' on the bill of sale to avoid tax?
- No. Alabama auditors specifically flag suspiciously low or symbolic prices and can reassess tax based on fair market value plus penalties. For a qualifying family gift, write 'GIFT' - for a non-qualifying transfer, expect tax on the real value regardless of what you write down.
- Do I still pay registration and ad valorem tax on a gifted car?
- Yes - gifting only affects the sales tax line. The $15 title fee, $23 registration, issuance fee, and annual ad valorem tax (based on assessed value and your local millage) apply the same way they would on a purchased vehicle.
- Is Form MVT 5-1 mandatory for a tax-free gift?
- Yes. Without a properly completed MVT 5-1 signed by both giver and recipient, the county has no documentation to waive the sales tax and will assess it as a standard transfer, even between qualifying family members.
- What if the car being gifted still has a loan on it?
- The lienholder has to release the lien before a gift transfer can go through - you can't gift a car that's still collateral for someone else's loan. Pay it off first, or the recipient can refinance it in their own name, which then becomes a taxable purchase rather than a gift.
- Does gifting to a grandchild get any tax break at all?
- No - grandparent-to-grandchild transfers are outside Alabama's immediate-family exemption and are taxed at the full 2% + local rate on fair market value, the same as gifting to a friend or in-law.
Receipts
Official sources
Every number on this page comes from these documents - check them yourself.
