Ad Valorem Tax Collection - Land and Lien Sales

Tax sales are the mechanism by which counties collect delinquent ad valorem taxes. There are two types of tax sales in Alabama. The first involves the county selling the taxpayer’s land to pay for the taxes, whereas the second involves the county selling the county’s lien against the land for the taxes owed. Under the first system, the purchaser obtains an interest in the property sold, evidenced by a certificate, which certificate may later be exchanged for a deed to the property. Under the second, recently updated, system, the purchaser at the sale obtains a lien on the property that can be foreclosed after three years. This latter sale of lien system was used for the first time in 2019 after legislative changes to the system in 2018. Ten counties have elected to use the sale of lien system in 2020.

Sale of Land

The sale of land system, which is established in Alabama Code §§ 40-10-1 through 40-10-143, is the system historically used by all Alabama counties until 2019 when several counties adopted the revised sale of lien system. While the majority of Alabama counties continue to use the sale of land system, the counties using the sale of lien system increased from 2019 to 2020. It will be interesting to see if this trend to the sale of lien system will continue.

To download this comprehensive white paper on Alabama Real Property Tax Sales, Redemption and Clearing Title, click here for the full pdf.