Getting Your Home Back After a Property Tax Sale in Alabama

Get your home back after an Alabama property tax lien sale by redeeming it. Here's how.

If you fail to pay your property taxes, the past-due amount becomes a lien on your home. This type of lien almost always has priority over other liens, including mortgages. Generally, when taxes remain unpaid, the taxing authority will eventually sell the lien (and if you don't pay the past-due amount to the lien purchaser, that party can foreclose or use some other method to get title to the home), or sell the property itself in a tax sale. Though, in some places, a sale isn't held; instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it. In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale.

In Alabama, once there is a tax lien on your home, the taxing authority may hold a tax lien sale. (Some homeowners might face a tax foreclosure instead of a tax lien sale. This article focuses on tax lien sales.) The high bidder at the tax lien sale doesn't immediately get title to the property. Instead, the buyer receives a tax lien certificate. Generally, after owning a tax certificate for three years, the purchaser can get a tax deed (that is, the purchaser can get ownership of the home). Or, if the state is the purchaser, it may then sell the home after three years elapse from the sale date, and that purchaser will get a tax deed.

If you don't "redeem" the property by paying what the purchaser paid at the sale, plus some other amounts, during the three-year period, you'll lose your chance to keep your Alabama home.

How Long Is the Redemption Period After an Alabama Tax Lien Sale?

In Alabama, if the state buys the tax lien, the property may be redeemed at any time before the title passes out of the state. If another party buys the lien, you may redeem the property at any time within three years from the date of the sale. (Ala. Code § 40-10-120, § 40-10-29, Ala. Code § 40-10-132).

Under Alabama law, if you occupy the property, you might be able to redeem even after the redemption period expires, though you'll probably have to ask a court to approve the redemption. (Ala. Code § 40-10-82). Talk to a lawyer to learn more about the laws that cover possession of the property following a tax lien sale and the effect they might have on your redemption rights.

How Much Does It Cost to Redeem a Property After an Alabama Tax Lien Sale?

The amount you'll have to pay to redeem depends on who buys the lien at the sale—the state or another party. Generally, you'll have to pay the amount the purchaser paid at the sale, interest, any additional taxes that become due, and costs and fees. (Ala. Code § 40-10-122, Ala. Code § 40-10-121).

Ways to Lower Your Property Taxes

Even though you'll get a redemption period after an Alabama tax lien sale, in most cases, it's better to take action before you become delinquent on your taxes to make them more affordable. You could, for example:

  • find out if you meet the criteria for a property tax abatement, or
  • request a change in the property's assessment if you feel your assessed property value isn't reflective of the fair market value.

How to Get More Information

If you want more information about property tax and redemption laws in Alabama, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer who has experience with property tax issues. To learn more about property taxes and other aspects of homeownership in general, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.

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