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Attempt to Reduce Tax Sale Redemption Interest Rate

Posted by 15789465 on

Representative Rodgers of Jefferson County has introduced a bill in the Alabama State House to amend the tax sale redemption statute.  It is HB 388 Representative Rodger’s bill, if successful, would:
  • Reduce the redemption interest rate from 12% to 1% per year for tax auction amounts, interim taxes, insurance premiums, and value of preservation improvements
  • Allow for auction interest on only the taxes due at the time of the sale, and not on any surplus bid.
Folks, do NOT take for granted that no one would vote for this bill.  I once spoke to a state legislator who was horrified about a new law and its consequences, and said it must have been passed before he was elected, because he would NEVER have voted in favor. It turns out, he was one of the sponsors, but obviously never even read the bill before agreeing to sponsor it!  (I could not possibly make up stuff this good. This is a true story!) If you are opposed to this bill, please contact your state representatives and senators to tell them.  After recent Alabama Supreme Court decisions regarding redemption, preservation improvements, and insurance premiums, a 1% redemption interest rate will destroy tax sale purchasing in this State.  Not only that, the State will end up with a LOT more properties on its rolls.  It might make more sense for people to take their property tax money, invest it in something at 5% interest, and then years later buy their (auctioned) property back from the state at only 1% interest.   This proposed law is insane! I suspect Representative Rodgers is simply grand-standing for his constituents and has no reasonable expectation this bill will pass.  But, it is irresponsible to waste everyone's time posturing when there are important issues that require our elected officials' full attention.  Shame on you, Representative Rodgers, if this bill is simply an attention grabber. Shame on you, also, for not thinking through the consequences to State and County coffers if investors stop going to tax sales. Maybe your time would be better spent raising money for a fund to help poor constituents pay their taxes, instead of destroying the entire system for the whole state.

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  • How ironic that John Rogers’ district is arguably one of the greatest beneficiaries of tax sale investors in the entire state.

    Gary Boyd on
  • Along with Baldwin County, where millions of dollars flow in every Spring from banks and other institutional investors looking for 12% money.

    deniselevans on

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