Tax Deed properties intrest rate, Alabama

[Wilson Lee]

Tax deed properties earn 12% interest.  Should a interested party (past owner or mortgagor) seek to redeem the property with right of redemption. They must pay back what was paid to the county for the tax deed. the cost of necessary repairs. the cost of quite tile legal fees.  But what is the 12% interest applied too? Is it for all expenses on the property or just the amount paid to the county?

Redemption price = (12% * (tax deed cost + necessary repairs + legal)) + tax deed cost + necessary repairs + legal

or

Redemption price = (12% * tax deed cost) + tax deed cost + necessary repairs + legal

[Denise Evans]

@Wilson Lee, the 12% is on the taxes and other allowed charges. Repairs are allowed only if the property contains a residential structure. Any type of improvements (including repairs) are allowed if the property is located within the official boundaries of an urban renewal or urban redevelopment district.  In either situation, cost of casualty insurance must be reimbursed.  With the right property (as described above) you also get 12% per annum interest.

The cost of quieting title is not an allowable expense upon redemption.  If the investor files an ejectment lawsuit and the taxpayer counterclaims for redemption, then the legal fees of the ejectment lawsuit must also be paid upon redemption.

If you buy from the state, it is not 12% interest on your purchase price, but each year's taxes continue to accrue interest at 12%.  Some part of the purchase price is already interest. You don't get to compound interest.