How Does A Tax Sale Work?

How Does an Alabama Tax Sale Work?

Property taxes become due in Alabama, every October 1st and are delinquent after December 31st.  Taxes are collected by the individual counties.   After a series of required notifications, any unpaid parcels must be offered at a public outcry auction, usually in the month of May or June.  Each county will set their own tax sale date.  Tax sales are normally conducted by the tax collection official for the particular county (usually the Revenue Commissioner or Tax Collector).

Anyone may attend a tax sale and bid on tax certificates#.  You will need to check with the individual county to learn their particular rules for participation.  Every county conducts its tax sale a little differently than the next.

Certificates are sold to the highest bidder.  Your winning bid will earn 12%, annual, simple interest with one exception.  The amount of your bid that exceeds the tax due is called the excess bid.  Any part of your excess bid that exceeds 15% of the value of the property will earn no interest.

Property owners have three years from the date of the original tax sale in which they can come to the county tax collection official and redeem their property (which means to pay the delinquent amount due plus interest).  When that occurs, you will receive the money you have paid plus 12%interest.  Each county will have their own procedure for paying redemption proceeds, with which you must comply.

If at the end of three years the property has not been redeemed, the purchaser at tax sale then qualifies to receive a tax deed, if all taxes have been paid since the original sale (Act #2009-508 #)  Again, check with the individual county for their administrative procedures on this.

Once a purchaser has secured and recorded their tax deed, they are entitled to the use and possession of the property.  NOTE:  IF THE PROPERTY IS OCCUPIED, IT IS MY RECOMMENDATION THAT YOU ENGAGE AN ATTORNEY TO INITIATE EVICTION PROCEEDINGS BEFORE YOU ATTEMPT TO ACTUALLY TAKE POSSESSION.

A tax deed may be redeemed by the owner, directly with the purchaser, within three years from the date of issuance of the tax deed, or indefinitely if the owner has maintained possession.


One response to “How Does A Tax Sale Work?”

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  1. John says:


    Thank you for the blog some great observations