Alabama Tax Sale Laws — Investor Guide

Investors purchase a lien on the property, earning interest until the owner redeems it or the investor forecloses.

Redemption Period

3 years from sale date

Max Interest Rate

12% / year

IRS Lien Survives

Yes — verify before bidding

Foreclosure Required

Yes — to convert lien to deed

Quiet Title Required

Yes

Counties Covered

67 counties

Quiet Title Required in Alabama

Before a title insurer will issue a policy on a tax deed property in Alabama, you'll need to complete a quiet title action.

$1,500–$5,000

Legal Fees

6–18 mo

Timeline

How Tax Sales Work in Alabama

Alabama is a tax lien certificate state. Certificates earn 12% per annum. The property owner has 3 years to redeem by paying the certificate amount plus 12% interest. If not redeemed, the certificate holder can apply for a tax deed. Competitive bidding is on the interest rate — counties with high demand often go below 12%. IRS liens survive if the IRS was not properly notified.

Quick Due Diligence Checklist for Alabama

Verify property is still on the auction list within 48 hours of sale (redemptions happen until the last minute)

Check for federal IRS liens — they survive the tax sale in Alabama

Search for HOA liens and municipal code violations — these may survive in some counties

Budget for foreclosure costs — required in Alabama to convert a lien to deed

Budget for quiet title action — required in Alabama before title insurance will issue

Drive the property or use street view to confirm structure exists and is accessible

Verify assessed value vs. back taxes owed — if taxes exceed assessed value, it may be a junk property

Source: Ala. Code §40-10-1 et seq. · Verified: January 2025 · Always verify current laws directly with the Alabama state statutes and your county treasurer. This is not legal or investment advice.

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