ALABAMA PROPERTY TAX SALES: INVESTOR OPPORTUNITIES IN 2027

By Gregory S. Stanley, Attorney at Law

TWO DIFFERENT

ALABAMA TAX-SALE SYSTEMS

The most important thing for investors to understand is that Alabama does not have a single tax-sale system -- Depending on the county, an investor may be purchasing a tax lien certificate or buying an actual tax interest in the property that includes a right to possession and rent.

Knowing which system a county is using should be the first step in preparing which counties to participate in for the annual tax sale. Alabama law permits county revenue collectors to choose between the tax deed system in Article 1, or the lien system under Article 7 of Chapter 10 of Title 40. Some Alabama counties have moved to the tax-lien system, while others continue to conduct traditional tax sales.

Under the tax-lien system, the investor purchases a tax lien, not the underlying real estate. The successful purchaser receives a tax lien certificate which does not afford any rights beyond accruing interest. On the fourth anniversary of the earliest tax sale, the investor may begin to foreclose the right of redemption and seek to quiet all other claims against the property.

The traditional certificate-to-deed system operates differently, and an investor immediately has a right to possession, and therefore rents on the underlying real estate. And while an investor may demand possession, they cannot quiet the title until three years after the certificate becomes a deed. Certificates become deeds on eth 3rd anniversary after the tax sale. That makes it dangerous for an investor to assume that a process, redemption period, foreclosure procedure, or investment strategy that applies in one Alabama county applies in another county.

Tax Certificate-to-Deed Counties

As we prepare for the 2027 Alabama tax-sale season, I am presently expecting traditional tax certificate/deed sales in the following counties and approximate sale dates:

Chambers County: Late April

Chilton County: First week of May

Choctaw County: Second week of May

Coffee County: Late April

Crenshaw County: May

Fayette County: First week of May

Greene County: Second week of May

Lee County: First week of May

Limestone County: First week of May

Lowndes County: First Tuesday in May

Montgomery County: First week of June

Pickens County: First week of May

Russell County: First week of May

Washington County: Second week of May

The individual counties have not announced their 2027 sale styles and dates. Investors should confirm county details in Spring of 2027.

THE ANNUAL SALE IS NOT THE ONLY OPPORTUNITY

Investors should also pay attention to tax liens that remain available after an annual auction. As one example, the official Mobile County Revenue Commission website maintains information concerning available county tax liens for purchase. make sure you are on the official site as there are many fake sites that will sell you the information that is available for free from the county.

Additionally, the Alabama Dept of Revenue has a list of available tax deeds from previous years that can be purchased directly from the state. Again, make sure you are on teh official state website as there are many scam sites out there.

OFFICIAL, COUNTY-SPECIFIC KNOWLEDGE IS ESSENTIAL

I do not recommend relying on any website that has tried to aggregate county information because they are almost always computer generated, dated, and flawed. Also, there are a lot of people that will answer questions or make comments on Alabama property tax law, but there are only about 5 actual experts in the state. Do not take legal advice from the internet.

The timelines are confusing because of the two different systems, recent changes to the timelines, and people thinking Alabama is like other states. (See my other articles on the Alabama Frankenstein property tax system.) I have found that most internet information concerning Alabama tax sales is simply wrong

For that reason, I recommend going directly to the county website. The county's Revenue Commissioner or Tax Collector website, Citizen Access Portal, published tax-sale notice, and other official county materials generally provide the best starting point for determining what is actually being sold. If you want a regulated community of investors that actually invest in Alabama join the Join Alabama Tax Lien Association | ATLASS for that community of knowledge to help you with your investments, and use their automated property tax investing AI for simple questions: Dex

START PREPARING BEFORE THE PROPERTY LIST IS PUBLISHED

For investors interested in the traditional tax certificate/deed counties identified above, the period from late April through early June should be an important part of the 2027 tax-sale calendar: But preparation should begin well before the sale.

Once the delinquent-property lists become available, you have a relatively limited period in which to research potentially hundreds of properties. Waiting until immediately before the sale to begin understanding the county's procedures can put an investor at a significant disadvantage.

The better approach is to identify the geographic areas you are interested in and then find out which county they are in. For example, Birmingham Alabama has properties in Jefferson and also in Shelby Counties. The learn how those counties conduct their sales, determine where their delinquent-property lists will be published, and be prepared to begin property-level due diligence when the lists become available.

START SLOW

I recommend to my clients that they start with one or at most two investment properties the first year you invest in property tax investments. A common blunder is exhuberantly investing in too many properties the first year and failing to learn with small numbers then grow the next year with confidence.

THE BOTTOM LINE

There is no bottom line because Alabama property taxes are too complicated, but understanding the complicated Alabama investment opportunities is what will set you apart and give you the edge. An investor needs to know not simply that a property is being sold because of delinquent taxes, but exactly what they are buying, what statutory system governs, what you can do after you invest, what redemption rights exist, and what must happen before the investment can produce 8% guaranteed interest or marketable title.

For 2027, I will be watching Alabama's county tax-sale websites and Citizen Access Portals closely as the property lists and sale dates appear. Alabama property-tax sales can present interesting and valuable opportunities. The key is understanding the system before buying the investment.

Attorney Gregory S. Stanley

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