New Tax Sale Strategy

Properties sold for unpaid Alabama income taxes are redeemed in exactly the same way, following the same rules, as for ad valorem tax sales.

The sale for unpaid income taxes does not prevent a lender from foreclosing, so those properties are riskier than ad valorem tax sales. On the other hand, there is often significant equity in them. Properties are sold for unpaid ad valorem taxes because the law says they MUST be sold. Properties are sold for unpaid income taxes because someone at the Department of Revenue decided the property had enough equity to make a sale worthwhile.

If there is still a mortgage on the property, the lender might be willing to let you simply begin making payments and cure the default.

When researching property records, don’t overlook these opportunities. Contact the former owner. If there is something worth pursuing, buy his or her redemption rights.