What Happens If I Don't Pay Property Taxes in Alabama?

If you’re delinquent on your Alabama property taxes, you could eventually lose your home after a tax sale.

If you don’t keep up with the property taxes on your Alabama home, you could eventually lose the property after a tax lien sale. Fortunately, you'll get several notices before the sale and the opportunity to get the home back afterward by “redeeming” it.

In this article, you’ll learn what notice you’ll get before an Alabama tax lien sale, how the tax lien sale process works, and how you can redeem your home after a tax lien sale.

What Is a Property Tax Lien?

If you own real property, you have to pay property taxes. The government uses that tax money to pay for schools, public services, libraries, roads, parks, and the like. Usually, the tax amount is based on the assessed value of the property.

In Alabama, taxes are due on October 1 and become delinquent on January 1. (Ala. Code § 40-1-3). When a homeowner doesn’t pay the property taxes, the overdue amount becomes a lien on the home. A lien effectively makes the property act as collateral for the debt.

What Happens if You Don’t Pay Property Taxes

All states have a process that allows the taxing authority to sell a home to collect delinquent taxes. (Learn about your options to avoid a tax sale if you can’t keep up with the property taxes.)

Alabama Property Tax Lien Sales

Once there is a tax lien on your home, the taxing authority may hold a tax lien sale. Alabama, unlike some other states, generally holds tax sales once a year, commonly in April and May, though it may vary.

Notice of the Tax Sale

Before the sale, the tax collector must first get a court decree from the probate court, authorizing a sale. (Ala. Code § 40-10-1). The tax collector has to provide two notices, one before and one after, this court proceeding.

Notice Before the Probate Court Proceeding

Ten days before the probate court proceeding, the tax collector must serve you with a notice by:

  • personally handing you (or your agent) a copy of the notice
  • leaving a copy of the notice at your residence or place of business, or
  • mailing you a copy of the notice by certified or registered mail. (Ala. Code §§ 40-10-4, 40-10-11).

If the tax collector can't get notice to you in any of these ways, it can publish the notice in a newspaper or post it at the county courthouse. (Ala. Code § 40-10-4).

This notice will tell you to show up at the hearing and demonstrate—if you can—why the court shouldn’t allow the tax lien sale. (Ala. Code § 40-10-4).

Notice Before the Tax Sale

If the court authorizes the sale, the tax collector must give notice of the sale, including the time of sale, 30 days before the sale by:

  • publishing a notice in a newspaper for three weeks, or
  • posting a notice at the county courthouse and in a public place for at least three weeks. (Ala. Code § 40-10-12).

Your Right to Appeal the Probate Court Decision

You have 30 days after the court authorizes the sale to appeal the decision to the county circuit court. You’ll have to post a bond and, if you lose, the costs of fighting the appeal get added to the tax lien. (Ala. Code § 40-10-25).

How Do Tax Lien Sales Work?

The high bidder at the tax lien sale doesn’t immediately get title to the property. Instead, the buyer receives something called a “tax lien certificate.” But first, the court must confirm the sale.

Within ten days after the sale, the tax collector files a report with the probate court asking it to confirm the sale. (Ala. Code § 40-10-13). You have five days to object to the report. If the court doesn’t agree with your objections and it finds that the tax collector followed the correct legal procedures in the sale, it will confirm the sale. The tax collector will then give the high bidder a “certificate of purchase.” (Ala. Code § 40-10-13).

Generally, after owning a tax certificate for three years, the purchaser is entitled to a tax deed (that is, the purchaser gets ownership of the home). Or if the state is the purchaser, it may then sell the home and that purchaser will get a tax deed. (Ala. Code § 40-10-29, Ala. Code § 40-10-132)

Who Gets Possession of the Home After the Tax Lien Sale

The holder of the certificate of sale is entitled to possession of the home.

When the State Gets Possession of the Home

If the State of Alabama is the high bidder at the sale, it’s entitled to possession of the home as soon as the judge signs the certificate of sale. The state must first demand possession of the home from you. If you don’t move out within six months after the sale date, the state can start an eviction action. (Ala. Code § 40-10-73).

When Another Purchaser—Other Than the State—Gets Possession of the Home

If someone else is the high bidder at the sale, that party is entitled to possession of the home as soon as he or she receives the certificate from the tax collector. To get possession, the purchaser must first make a demand that you give up possession of the home. If you don’t move out within six months of the demand, that party can start an eviction action against you. (Ala. Code § 40-10-74).

How to Redeem the Property After a Tax Lien Sale

After the tax lien sale, you get the chance to pay off the amounts owed and keep your home. This process is called “redeeming” the property.

Under Alabama law, generally, if the state buys the property, you may redeem at any time before the title passes out of the state, or if someone else buys the home, within three years from the date of the sale. (Ala. Code § 40-10-120). An owner who retains possession might be able to redeem beyond the redemption time limit, though you’ll most likely have to ask a court to approve it. (Ala. Code § 40-10-82). Talk to an attorney if you need more information about the law surrounding giving up possession of your property following a tax lien sale and the effect it might have on your redemption rights.

If you don’t redeem, the holder of the certificate of purchase gets title to the home. (Ala. Code § 40-10-29.) (Learn more in Getting Your Home Back After a Property Tax Sale in Alabama.)

Speak to a Lawyer

If you’re facing a property tax foreclosure in Alabama—or you need help redeeming your property—consider talking to a foreclosure lawyer or a real estate lawyer.

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