How Alabama Tax Sales Work

Alabama is the one state where you have to check the county before you check anything else. Two separate systems sit side by side in the code, and each county's tax collecting official picks which one to run that year. Most have moved to the tax lien auction, which sells a certificate and pays interest. The older process sells the land itself. Both live in Title 40, Chapter 10 of the Code of Alabama.

Here is the full cycle for the lien auction, plus what changes if your county still runs the older route. For live county-by-county sale dates and platforms, the Alabama tax sales hub has each office, and how to buy tax liens in Alabama walks the buyer's steps. If the lien-versus-deed distinction is new to you, start with tax liens compared to tax deeds.

Step 1: The county picks its system

Under Section 40-10-180, the tax collecting official has sole authority to decide whether the county sells tax liens or sells land, and the decision is published by October 1 for the following year. A county can switch. That is why an Alabama strategy built on one county's rules can break the moment you cross a line on the map. Confirm the current year's choice with the office before you plan a bid.

Step 2: Taxes go delinquent

Property taxes become due October 1 and the lien attaches for the year. When they go unpaid, the parcel enters the delinquent list that feeds the sale.

Step 3: The auction runs between March 1 and June 15

Section 40-10-182 sets the window. The auction happens no earlier than March 1 and no later than June 15 of the current tax year, running 8:30 a.m. to 4:00 p.m. The auction list and the taxpayer notice both publish at least 30 days ahead. Counties may run the sale online or in person, and most of the online counties use GovEase.

Step 4: Bidding runs down from the statutory ceiling

This is a reverse auction on yield. Section 40-10-184 caps the opening bid at 12% per year, and each bid has to be lower than the last. The lowest accepted rate wins. Ties are broken by lots in person, or by random draw online.

Watch the floor, because there is not one. Alabama sets no minimum return. Bidding can reach 0 percent, and if you win at a low rate that low rate is what you earn. Florida's 5 percent minimum has no equivalent here.

The bid step itself is county practice rather than statute, so confirm the increment at registration.

Step 5: You pay, and a prior holder gets first refusal

The purchase price is all taxes, interest, penalties, fees and costs due, plus a 45 dollar administrative fee. Payment lands one hour before close of business on auction day, or by close of business two days later if the sale ran online.

One wrinkle worth knowing: under Section 40-10-191, a holder of an existing certificate on the parcel has the first right to buy the new lien. If they pass, the winning bidder covers what is owed to them.

Step 6: Redemption pays your bid rate

Redemption under Section 40-10-193 pays the certificate face amount, which covers tax, interest, penalties, fees and costs including the title report, plus interest at the rate you actually bid, plus any other taxes and fees then due. A 10 dollar certificate-of-redemption fee applies.

The owner can redeem at any time until the circuit court enters judgment in a foreclosure action. There is no fixed cutoff date on the owner's side.

Step 7: The four-year wait, then circuit court

Alabama has no county tax deed auction under the lien system. Title moves only through the courts. Section 40-10-197 lets a holder of all the sold, unexpired certificates on a parcel file an action in circuit court to foreclose the right to redeem and quiet title, and that filing cannot happen until four years after the auction.

That number changed recently. Act 2024-261 lengthened the wait to four years effective October 1, 2024, and it applies to every lien with no final judgment as of that date. Certificates bought under the older shorter rule are not grandfathered. Plenty of investor guides and even some state summaries still quote the old figure, so check the statute itself.

The outer limit is 10 years from the auction. Miss it and the certificate expires and the lien becomes void.

Step 8: What you do not get while you wait

Section 40-10-198 is the part investors underestimate. Before the clerk's deed issues, a certificate holder has no right to possession, no right to make repairs, and no right to collect rent. You hold a financial position, not a property, and the eventual deed comes from the circuit clerk rather than a treasurer.

Section 40-10-197 also lets someone redeeming demand a public auction, where the court sets a minimum bid covering the redemption amount plus back taxes and allowed costs, with any surplus going to the owner.

Buying liens that nobody bid on

Liens that draw no bid stay with the county and keep accruing. Under Section 40-10-199 the tax collecting official may sell an unsold lien at private sale at any time after the auction, priced at no less than all taxes, interest, penalties, costs and fees, plus whatever is owed to a prior certificate holder. That is Alabama's over-the-counter route, and the Alabama over-the-counter page covers how counties handle it.

If your county runs the older system

Counties still on the Article 1 process sell the property rather than a lien. That route runs on its own shorter clock under Section 40-10-120, and it pays a fixed 8 percent per year on the sale price and on taxes the purchaser paid, with interest on part of any excess bid. The probate judge issues the deed once that window closes. The rate is fixed rather than bid, so the yield math is completely different from the auction described above. Confirm the current window with the county office, since the two routes do not share a timeline.

Putting it together

Alabama rewards investors who confirm two things before bidding: which system the county is running this year, and that the four-year foreclosure clock now applies to certificates they may already hold. The absence of a rate floor also means discipline at the auction matters more here than in states with a statutory minimum. Compare the numbers against other states on the tax lien interest rates by state table, then work the county detail from the Alabama hub.