Property tax foreclosure in Alabama

The property tax process in Alabama, step by step

1. Taxes become delinquent

   Due October 1, delinquent after December 31

   The state, county and city have a lien on your property for the taxes from October 1. Once taxes are delinquent they carry interest of 12 percent a year until the tax sale.

   Ala. Code §§ 40-1-3, 40-5-9

2. Notice and order of sale

   Before the sale

   The probate judge issues a notice telling you to appear and show why your property should not be sold, and the tax collector serves it on you in person, at your home, or by certified mail. The tax collector also publishes a sale notice for three weeks in a row or posts it at the courthouse. Paying the taxes, interest and costs before the sale stops it.

   Ala. Code §§ 40-10-4, 40-10-12

3. Tax sale or tax lien auction

   At the courthouse, between 10 a.m. and 4 p.m.

   In a tax sale county, the property is auctioned to the highest bidder for cash, and the buyer gets a certificate of purchase. In a tax lien county, a lien certificate is auctioned instead and earns the interest rate the buyer bid, while you keep title.

   Ala. Code §§ 40-10-15, 40-10-180, 40-10-187

4. Redeem within three years

   Within 3 years of the tax sale

   You redeem through the probate judge by paying the sale amount with 8 percent interest a year for sales since 2020 (interest on a large excess bid is limited), plus taxes the buyer paid with interest. For a home, you may also owe the buyer's insurance premiums and the value of repairs that preserved it. The buyer can demand possession and sue to remove you if you do not leave within six months of that demand.

   Ala. Code §§ 40-10-74, 40-10-120, 40-10-122

5. Tax deed to the buyer

   After 3 years

   If you have not redeemed, the probate judge must give the buyer a tax deed once the buyer turns in the certificate and shows all taxes are paid. If you kept possession of the property, you may still have a right to redeem through the circuit court, so get legal help quickly.

   Ala. Code §§ 40-10-29, 40-10-82, 40-10-83

6. Tax lien foreclosure case

   4 to 10 years after the lien auction

   A lien holder must mail you a notice 30 to 180 days before suing, then file in circuit court, and judgment cannot come sooner than 90 days after filing. You can redeem any time before judgment. Instead of redeeming, you can demand that the court sell the property at public auction, and any surplus after the lien holder's amounts and costs goes to the owners as the court decides.

   Ala. Code § 40-10-197

7. Claim the excess from a tax sale

   Redeem within 3 years, or claim from year 3 to year 10

   Any amount bid above the taxes and costs is held in a separate county account. In the first three years you get it by redeeming and proving that to the county commission, and from year 3 to year 10 (for sales in 2016 or later) the owner at the time of sale can get it by redeeming through a court order or by agreement, or by signing a recorded release and waiver giving up the property. Money not claimed within that time goes to the county.

   Ala. Code § 40-10-28

Common questions in Alabama