Alabama Tax Liens

 Sale Type:  Tax Lien Certificates
 Interest Rate:  12% APR
 Bid Method:  Premium Bid
 Redemption Period:  3 Years
 Sale Date(s):  May
 State Statute(s):  Sections 40-10-1 through 40-10-198, Articles 1-7
 Over-the-Counter:  Yes
 State Website:  http://www.alabama.gov/

Alabama State Overview

Alabama is a tax lien certificate state, but also offers tax deed properties in select counties. Tax sales are usually conducted in or in front of the county courthouse building or may be held in any other county owned building. Investors are required to register prior to the auction, although most counties will allow you to register the day of the auction. Upon registration investors will be given a bidder number which will be used during the tax lien auction.

Tax liens are purchased with a 3 year redemption period and a 12 percent annual rate of return or 1 percent per month. Some counties pay interest on both the minimum and premium bid amounts. The majority of the counties use a premium bidding system when auctioning the tax liens.

Alabama uses the premium bidding method at the tax sale.  Bidders compete by the amount they are willing to pay above the minimum bid. The total of the delinquent taxes, interest, costs, and penalties determine the minimum bid.

The redemption period for Alabama is 3 years from the date of the sale.  Following the 3 year redemption period the county judge of probate awards the deed to the property to the tax lien holder.

Over-the-counter sales in Alabama are handled on the state level it is called “sold to state,” and they offer both tax liens and tax deeds. You can also contact the Commissioner of Revenue for the state to see if there are any tax liens that did not sell on the county level: Alabama Department of Revenue Property Tax Division P.O. Box 327210 Montgomery, AL 36132-7210.

In Alabama the office responsible for collecting delinquent real property taxes is a state government office.

If the state has held a Certificate of Sale less than three years from the date of sale by the county tax collection official, the Certificate will be assigned to the purchaser. If the property is not redeemed by the three year anniversary of the sale to the State, the Certificate holder can surrender the original assigned Certificate to the county redemption official and receive a tax deed upon payment of a nominal issuance fee.

If the State has held a Certificate of Sale more than three years from the date of sale by the county tax collection official, a tax deed will be issued to the purchaser by the State. Tax deeds are given without warranty or covenant of any type; it is the purchaser’s responsibility to determine what, if any, interest in the property is actually being purchased. No refunds are made unless the State had no interest to sell, and then only within two years from the purchase date.