Getting Your Home Back After an Alabama Property Tax Sale

Redeeming your house after an Alabama property tax lien sale allows you to reclaim it. This is how.

If you do not pay your property taxes on time, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages. When taxes are not paid, the taxing authority will either sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another way to get title to the house) or sell the property itself in a tax sale. In certain areas, however, no auction is made; instead, the taxation body enforces its lien by acquiring ownership to the residence. The taxation body is then required by state law to dispose of the property, typically by selling it. Before conducting a sale, the taxation authority in some countries utilizes a foreclosure procedure.

In Alabama, if your house has a tax lien, the taxing authority may conduct a tax lien sale. (Some homeowners may face tax foreclosure rather than a tax lien sale. This article is about tax lien sales.) The property is not instantly transferred to the highest bidder during the tax lien auction. The buyer instead obtains a tax lien certificate. In most cases, the purchaser may get a tax deed after three years of possession of a tax certificate (that is, the purchaser can get ownership of the home). Alternatively, if the state is the purchaser, it may sell the residence after three years from the selling date, and the purchaser will get a tax deed.

If you do not “redeem” the property within the three-year term by paying what the purchaser paid at the sale plus certain extra payments, you will forfeit your opportunity to retain your Alabama home.

What Is the Redemption Period Following an Alabama Tax Lien Sale?

If the state purchases the tax lien in Alabama, the property may be redeemed at any point before the title is transferred out of the state. If another party purchases the lien, you have three years from the date of sale to redeem the property. (Ala. Codes 40-10-120, 40-10-29, and 40-10-132).

If you inhabit the property, you may be allowed to redeem even after the redemption time has expired, however you will almost certainly have to approach a court to sanction the redemption. (Alabama Code 40-10-82). Speak with a lawyer to learn more about the regulations that govern property ownership after a tax lien sale and the impact they may have on your redemption rights.

What Is the Cost of Redeeming a Property After an Alabama Tax Lien Sale?

The amount you must pay to redeem is determined by who purchases the lien during the sale—the state or another party. In general, you must pay the amount paid at the sale, plus interest, any extra taxes that become due, and any expenses and fees. (Alabama Code 40-10-122, Ala. Code 40-10-121).

How to Reduce Your Property Taxes

Even though you will have a redemption time after an Alabama tax lien sale, it is usually advisable to take action before your taxes become late in order to make them more inexpensive. For example, you could:

Find out whether you qualify for a property tax abatement, or seek a revision in the property’s assessment if you believe the assessed value does not represent the fair market value.