The statutory ceiling
This is the maximum. Bidders compete by bidding the rate down at the sale, so the rate you actually earn is set at the auction and is often lower. There is no statutory minimum, so a competitive bid can run the rate to zero.
No minimum rate
Alabama sets no statutory floor. A certificate bid down to a low rate, or to zero, earns only that rate, so competition can erase the yield entirely.
How interest accrues
The tax lien certificate bears the interest rate per year that the purchaser bid at auction, or agreed at a private sale, until the lien is redeemed or foreclosed. Statutory fees the holder pays in connection with the certificate are added to the redemption amount and carry the same rate. Interest on liens that draw no bid keeps accruing at the rate charged on delinquent real property taxes. Alabama sets no minimum return, so the bid rate is the whole return.
Why some certificates are bid to zero
Bidders compete on interest rate, not price. The amount to be paid is fixed at all taxes, interest, penalties, fees and costs due, plus a 45 dollar administrative fee and any amount owed to a prior certificate holder who did not exercise the first right to purchase. The beginning interest rate bid cannot exceed 12 percent and each later bid must be lower than the one before it. Alabama sets no minimum-return floor, so bidding can run to zero percent and a low winning bid earns only that low rate. The bid increment and the auction procedure are set by the tax collecting official rather than by statute, so confirm both before you register. A tie at an in-person auction is broken by drawing lots, and a tie online is broken by a random number generator.
When the certificates sell
The tax lien auction is held no earlier than March 1 and no later than June 15 of the current ad valorem tax year, between 8:30 a.m. and 4:00 p.m. on the auction date. The tax collecting official must notify each delinquent taxpayer at least 30 days before the auction by first class mail plus newspaper advertising, an official online posting, or courthouse posting, and must prepare the tax lien auction list at least 30 days ahead.
The headline rate is a ceiling, not a forecast. To see what a certificate actually pays after the rate is bid down, run the numbers in the yield calculator, and compare Alabama against other states on interest rates by state.
Verified Jul 25, 2026 against Alabama statutes.
Tax Sale Atlas publishes educational information about public tax sale processes. This is not legal, financial, or investment advice. Rules, dates, and fees change; confirm with the county office before you bid.