Alabama

Two systems, and the county picks one each year

Alabama property taxes become due on October 1, and the state's lien attaches on that date (§ 40-1-3, Code of Alabama 1975). Taxes not paid before the following January 1 are delinquent (Cherokee County Revenue Commissioner, tax lien sale FAQ). What happens next depends on the county.

Since Act 2018-577, the tax collecting official of each county has the sole authority to decide whether the county collects delinquent taxes by selling a tax lien or by selling the property, and that decision applies to all real property in the county for that year (§ 40-10-180(b)). A change of method must be published on the official's website, or advertised once a week for three weeks in a local newspaper, no later than October 1 (§ 40-10-180(c)).

The two systems are very different investments. The tax lien auction (§§ 40-10-180 to 40-10-200) is a bid-down auction on the interest rate, and you get the property only through a circuit court foreclosure after at least four years. The tax sale of property (§§ 40-10-1 to 40-10-30) is an auction on the price, a certificate of purchase, a three-year redemption period and then a deed from the probate judge. Before you look at a single parcel, find out which one your county uses this year. Mobile, Morgan, Cherokee and Walker counties all describe their sales as online tax lien auctions on GovEase, and Walker County says it switched from property sales starting with the 2020 tax year.

Lien auction counties: you bid the rate down from 12%

The auction must be held no earlier than March 1 and no later than June 15 of the tax year (§ 40-10-181(3)). A lien goes to the bidder who pays all taxes due, including earlier years, with interest, penalties, fees and costs; pays an administrative fee of $45; and bids the lowest interest rate on the amount needed to redeem (§ 40-10-184(b)(1)). The opening rate cannot exceed 12%, and each new bid must be lower than the one before (§ 40-10-184(b)(2)).

So in Alabama the price of a lien is fixed and only the rate moves. Cherokee County puts it plainly: the purchase amount is already set, and bids are the interest the buyer will accept. In practice the step is one percentage point: Cherokee, Mobile and Walker counties all run 12%, 11%, 10% and so on down to 0%. If two bidders are both at 0%, an online auction is decided by a random number generator and an in-person one by drawing lots (§ 40-10-184(b)(3)). Cherokee County keeps each lien open for 30 seconds and adds 10 seconds whenever a bid arrives in the last 10.

Payment is fast. Mobile County requires a deposit of 10% of your approved bid amount and full payment by close of business two days after the auction; Walker County also wants payment within two days; Cherokee County gave buyers until May 8, 2026 to pay for its April 30 auction. The certificate you receive states the rate you bid, and it bears that rate until it is redeemed or foreclosed (§ 40-10-187(c)). Liens nobody buys stay with the county. The tax collecting official can sell them later at a private sale at a rate agreed with the buyer, not over 12% (§ 40-10-199(a)(1)).

Redemption in lien counties: no fixed period, a 4-to-10-year window

A lien certificate has no three-year clock. The owner, a mortgagee, anyone else with an interest, or a judgment creditor can redeem by paying the tax collecting official the amount on the certificate, which includes the cost of a title report obtained for a foreclosure, plus interest at the certificate rate and any taxes due since (§ 40-10-193(a)). Statutory fees you paid are added and also bear interest at your rate (§ 40-10-193(b)). The collector mails you a copy of the certificate of redemption within ten days, and you get your money by surrendering the original certificate (§ 40-10-196).

If nobody redeems, you can sue in circuit court to foreclose the right to redeem and quiet title, but not sooner than four years and not later than ten years after the auction, and only if you hold all the sold, outstanding certificates on the parcel (§ 40-10-197(a)(1)). If you have not filed by year ten, the certificate expires and the lien becomes void (§ 40-10-197(j)).

The foreclosure has its own steps. Between 180 and 30 days before filing, you must send a notice of intent by mail to the owners, every recorded mortgagee and lienholder, the tax collecting official, and anyone else who may reasonably have an interest, including apparent heirs and the people behind an owning business. You also file an affidavit listing who you notified and how you found them. Skip the notice and the court must dismiss the case (§ 40-10-197(c)). Judgment cannot come sooner than 90 days after filing unless every owner waives (§ 40-10-197(e)(2)). Anyone may still redeem right up to judgment, and if they redeem after being served, the court orders them to repay your reasonable costs and attorney fees (§ 40-10-197(h)).

Then there is the provision that most often surprises buyers. Anyone entitled to redeem can, instead of redeeming, demand that the property be sold at public auction. The court sets the minimum bid at what you are owed plus costs, and you are deemed to bid it. If an outsider bids more, you are paid off and the surplus goes to the former owner (§ 40-10-197(i)). You may end up with your money and interest rather than the house.

Subsequent taxes: buy next year's lien or be bought out

If next year's taxes on your parcel also go unpaid, you have the first right to buy that lien at the same interest rate as your certificate. You must use it between five and thirty days before the auction (§ 40-10-191(a)). Mobile and Morgan counties both point certificate holders to this provision.

If you do not, the redemption price of your certificate is added to the purchase price of next year's lien, your certificate is cancelled, and its rights pass to whoever buys the new lien. Your money is sent back to you within 30 days of the sale (§ 40-10-191(b)). This matters because foreclosure requires holding every outstanding certificate on the parcel. Miss the window and someone else can take over your position.

Until you have a clerk's deed, the property is not yours to touch. A certificate holder may not enter or possess the property, make repairs or alterations, or charge the owner rent as part of redemption (§ 40-10-198(c)). You can walk away from a certificate at any time by surrendering it, but you lose everything you paid (§ 40-10-191(d)).

Property sale counties: the price goes up and the rate is eight percent

In counties that sell the property, the sale is a public auction to the highest bidder for cash, held at or inside the courthouse or courthouse annex between 10:00 a.m. and 4:00 p.m., and it continues day to day until everything has been sold (§ 40-10-15(a)). No sale can be for less than the taxes and expenses (§ 40-10-16). The winning bidder must pay at once. If you do not, the parcel goes straight back up for sale (§ 40-10-17). Within ten days the collector reports the sale to the probate court, which confirms it after five days without objections (§ 40-10-13). You then get a certificate of purchase (§ 40-10-19), which can be assigned by endorsement (§ 40-10-21).

When the owner redeems, they pay the amount the land sold for, with interest at eight percent per annum from the date of sale. Interest runs only on the portion of any excess bid that is no more than 15 percent of the market value set by the assessing official. Taxes you paid in the meantime are repaid at eight percent (§ 40-10-122(a)(1)). For taxes delinquent on or after January 1, 2020, the related court remedies in §§ 40-10-75 and 40-10-83 also use eight percent.

Here is how that works. A parcel with a market value of $100,000 owes $3,000, and you win it at $25,000. Your excess bid is $22,000. Only the first $15,000 of it, 15% of market value, earns interest. The other $7,000 comes back with nothing on it. The owner redeems one year later. You earn eight percent on $18,000, which is $1,440. On the $25,000 you put up, that is about 5.8%.

If the property contains a home, the owner who redeems must also repay the casualty insurance premiums you paid and the value of preservation improvements, both with interest at eight percent. The improvements are valued by an exchange of written figures, and if the parties disagree, by referees and an umpire (§ 40-10-122(c)–(e)). If you do not appoint your referee in time, you lose the claim for the improvements (§ 40-10-122(e)).

Redemption and the deed in property sale counties

The owner, their heirs, a mortgagee, anyone with an interest or a creditor with a lien can redeem within three years from the date of the sale. A minor or a person of unsound mind gets one more year after the disability ends. A mortgagee or lienholder whose interest was recorded at the time of the sale gets one year from your written notice of the purchase, in addition to the three years (§ 40-10-120(a)). If you want that extra year to start running, send the notice.

After three years, the probate judge issues you a deed when you return the certificate, prove all ad valorem taxes are paid and pay a $5 fee. The deed does not convey the rights of any reversioner or remainderman (§ 40-10-29). It is prima facie evidence that the proceedings were regular (§ 40-10-30), but it is not the end of the matter.

An action to recover land sold for taxes generally has to be brought within three years of the date you became entitled to demand the deed (§ 40-10-82). However, there is no time limit at all for an owner who kept possession. On vacant land, possession is presumed to follow the original owner's title, and only three years of your own adverse possession after you became entitled to possession cuts it off (§ 40-10-82). In court the owner can still redeem by paying your bid and subsequent taxes with eight percent, subject to the 15% cap on excess-bid interest, plus a reasonable attorney's fee (§ 40-10-83).

Where the list is published, and what nobody bids on

Lien auction counties must notify each delinquent taxpayer by first-class mail at least 30 days before the auction. They must also advertise the auction in one of three ways: once a week for three weeks in a local newspaper, on the official's website, or by posting at the courthouse. The notice must state the time, the location, and whether the auction is online or in person (§ 40-10-182(b)). The tax lien auction list, with owners, descriptions, years and amounts due, must be ready at least 30 days before (§ 40-10-183). Cherokee County publishes its list on its website after March 1 and opened GovEase registration on March 30, 2026. Mobile County's registration deadline was April 6, 2026. For the dates already announced, see the Alabama rows in our auction calendar.

Property sale counties must give 30 days' notice by publishing for three successive weeks in a county newspaper, or post a notice at least three weeks before at the courthouse and in the parcel's precinct (§ 40-10-12).

In a property sale, a parcel nobody bids enough on is bid in for the state by the probate judge (§ 40-10-18). These parcels end up in the Department of Revenue's inventory, which it lists county by county in transcripts it updates weekly. You can request a price quote online and have 10 calendar days to pay. If the state has held the certificate for less than three years, you get an assignment of it. After three years, you get a tax deed (Alabama Department of Revenue). The assignment price includes interest at 12 percent per annum on the state's bid and on later taxes (§ 40-10-21; § 40-10-132(b)(1)). This is where the familiar 12% figure still applies. The Department adds its own warning: neither an assignment nor a tax deed gives clear title.

The surplus

The excess in a property sale is the amount above the decree, costs and expenses. It is paid to whoever redeems the property if they prove the redemption to the county commission within three years of the sale. Until then it sits in a separate county account, and the county keeps any interest it earns (§ 40-10-28(a)(1)). A redeeming owner can use a voucher for the excess bid instead of putting up that amount in cash (§ 40-10-28(a)(2)).

For sales in 2016 or later, the excess can be claimed from three to ten years after the sale. The claimant must prove a court-ordered redemption or a negotiated one, or the owner must sign and record a release and waiver of any right to redeem. After ten years the county keeps the money (§ 40-10-28(b)–(c)). Lien auctions have no excess bid, because the price is fixed. A surplus only appears if the property goes to a court-ordered auction in the foreclosure, and then it goes to the former owner (§ 40-10-197(i)(7)).

Six ways people lose money here

1. 1. Assuming every county sells the same thing

   Each county's tax collecting official chooses a lien auction or a property sale every year (§ 40-10-180(b)). Check before you research parcels.

2. 2. Quoting 12% in a property sale county

   Redemption interest on a property sale is eight percent, and on excess bid only up to 15% of market value (§ 40-10-122(a)(1)).

3. 3. Bidding a lien down to 0%

   The certificate bears the rate you bid (§ 40-10-187(c)). At 0% you advance the taxes and earn nothing while you wait.

4. 4. Ignoring next year's lien

   If you skip your first right to buy it 5–30 days before the auction, your certificate is cancelled and bought out (§ 40-10-191).

5. 5. Letting year ten pass

   If no foreclosure action is filed within ten years of the auction, the certificate expires and the lien is void (§ 40-10-197(j)).

6. 6. Treating a probate deed as clean title

   An owner who kept possession can come back with no time limit (§ 40-10-82). The state's own deeds come without clear title either.