Property Tax Liens In Alabama
Property Tax Liens In Alabama are sold as Tax Lien Certificates.
Alabama tax lien certificates are sold at during May or June at local county tax sales. The bidding begins at just the back taxes owed. The winning bidder is given a tax lien certificate. Understand that property tax liens In Alabama are sold as tax lien certificates not tax deeds.
The property owner has a three year redemption period in Alabama. To pay off the lien and redeem the property owner has to pay the amount you paid as the investor for the certificate. And in addition, he or she will owe you 12% per annum. But this 12% is based upon the minimum and the overbid. And this is a a point you need to fully understand.
You will only earn interest at the rate of 12 percent per annum on the amount of all taxes and any excess bid that is less than or equal to 15 percent of the market value as established by the county board of equalization which can be determined by reviewing the tax collector records.
Therefore, should the investor should enter into competitive bidding, he or she should never place a bid in excess of 15 percent of the value as determined by the county board of equalization.
If the property is not redeemed within the three year redemption period the purchaser of the Alabama tax lien certificate can apply for a tax deed to the property.
In Alabama, you can also purchase tax liens at any time and they are kept up to date on the Alabama Department of Revenue website.
The county tax official responsible for maintaining the tax sale records may be able to assist you in determining which properties are available in that county. This office will only accept written applications to purchase property.
The State of Alabama will let you send a letter expressing an interest in purchasing property subject to outstanding tax liens. You will have to state the county the property is located in.
Tell them the name the property was assessed in. Also state when it sold for its taxes. Include in the letter, the legal description maintained by the county taxing officials. Also add the name and mailing address of the applicant.
Price quotes, cancellation notices, redemption notices and notifications of property sold are sent by EMAIL in Alabama.
On property the state has held for less than three years from the tax collector’s sale, an assignment of the certificate of sale which was issued to the state will be made to the purchaser.
The assignee is required by statute to assess the property for future taxation. This is done by contacting the local tax assessing official. You have thirty days from the date of assignment to do this.
Some tax certificates will not be redeemed during the three year redemption period. In those cases you can surrender the certificate to the appropriate county official. Thus, you receive a tax deed for a nominal issuance fee.
Some property tax certificates will be paid off by the property owner during the three year redemption period.
Therefore, you as the tax sale purchaser will generally receive the amount paid for the property with interest. This interest is twelve percent per annum plus subsequent taxes paid with interest at twelve percent per annum.
On property the state has held for longer than three years from the date of the tax collector’s sale, a tax deed will be issued to the purchaser. No warranty or covenant of any kind is made by the State of Alabama.
The tax deed holder should record the tax deed in the county probate office and contact the local tax assessor.