Tag: Homestead

NORTH METRO ATLANTA — Georgia counties, cities and school districts have a month to decide whether to participate in the statewide floating homestead exemption established in House Bill 581.

The bill’s aim is to protect owner-occupied homeowners from wild fluctuations in property tax assessments.

Voters across Georgia approved a referendum in November that puts HB 581 into practice. The bill caps annual property assessments at the inflation rate, which is based on the consumer price index. The law went into effect this month. 

A floating homestead exemption generally offsets or softens increases in the taxable value of property. 

“The intent is to protect those homeowners. It does slow the growth of the digest for your residential homestead properties,” said Dante Handel, associate director of governmental affairs at Association County Commissioners of Georgia, which lobbies for and advises all 159 counties in the state. 

Under the new law, residential property assessments — or the taxable value placed on a home – cannot increase more than the inflation rate each year. Only residential, homesteaded properties are eligible. The tax break does not apply to commercial, industrial or non-homesteaded properties, such as rentals.

Under Georgia law, a home with a fair market value of $750,000 has a taxable value of $300,000 – or 40 percent. The new law would not allow the taxable value of the property to increase more than the inflation rate each year, no matter how much the home gains in real value.

For example, if a home’s real value appreciates by 10 percent over the course of a year, its taxable value would not reflect the same increase. Instead, its taxable – or assessed – value would increase only by the inflation rate, which right now stands at 2.7 percent.

Cities, counties and school districts can opt out of the new state exemption. But, they must first hold three public hearings and notify the Secretary of State’s office by March 1. This is the only time a local government can opt out.

If a local government takes no action, it will be automatically “opt in,” and owner-occupied homeowners would receive the floating exemption.

If a city or county already has a floating exemption, like Fulton County’s 3 percent floating homestead exemption, then homeowners would receive whichever is more beneficial if the local government has opted in on the new state law, Ryan Bowersox, assistant general counsel for the Georgia Municipal Association said.

In cities or school districts that offer a flat-rate homestead exemption, the floating exemption would be added on top of that. 

The floating homestead exemption would provide some predictability regarding property taxes if a local government participates, according to Latisha Gray, director of communications for GMA.

“As a homeowner stays in their home, over time, they can come to expect consistent change/increase in their home’s taxable value,” Gray said. “This helps avoid the possibility of a rapid increase in a given year, which can possibly result in a greatly increased property tax bill compared to the previous year.”

She added that the exemption will impact cities differently depending on the makeup of their tax digest and how often homes sell. 

“If a city was required down the road to raise their millage rate to maintain the same level of revenue due to the exemption, the tax burden would shift more to the non-homesteaded portion of the digest,” Gray said. 

Non-homestead properties, such as commercial, industrial, agricultural, and multifamily residential, will continue to be taxed based on their fair market value. 

Renters will not see the benefit of the homestead exemption, because they are treated as commercial properties, according to GMA General Council Bowersox.

Here’s a look at what local cities, schools and Fulton County are planning to do:

– Alpharetta does not intend to opt out of the statewide exemption, as the city already has a floating exemption in place.  

“As the new law allows both to exist simultaneously, and the proper exemption will be applied to the benefit of the property owner, I do not see any reason to make a recommendation to the mayor and City Council that we opt out,” City Administrator Chris Lagerbloom said. 

Finance Director Tom Harris added that Alpharetta, Roswell and Milton brought legislation forward to the state legislators to create a floating homestead exemption to “be based on the difference between the current assessed value and an adjusted base value of the homesteaded property” within those three cities. The exemption was approved in 2018. 

“The adjusted base value is the initial assessed value at 2018 or at time of homestead, if later, adjusted annually at the lesser of 3 percent or CPI (Consumer Price Index),” Harris said. “In essence, this exemption will cap the annual growth in value to which the millage rate applies to the lesser of 3 percent or CPI.”

– Dunwoody has a property assessment freeze in place and does not plan to opt out of HB 581. The freeze would remain no matter what the city decides regarding the statewide floating exemption. 

“The City of Dunwoody already has a property assessment freeze in place that is actually more restrictive than the new state freeze in that it doesn’t allow for inflation,” Dunwoody Communications Director Jennifer Boettcher said. “‘Opting out’ regarding HB581 only applies to the new statewide freeze, not the one currently on the books in Dunwoody. 

– Fulton County has a 3 percent floating homestead exemption. The County Commission decided to opt into the statewide exemption. 

“We want to be clear that Fulton County is committed to property tax relief for homeowners,” County Commission Chairman Robb Pitts said in a statement. “Our action today [Jan. 8] will ensure that they get the best deal possible.”

All homeowners who have a Fulton County homestead exemption in place automatically receive a floating homestead exemption. For those receiving the new floating exemption in the 2025 tax year, the property’s assessed value in 2024 will determine the exemption’s base value, the county says. 

– Fulton County School District plans to opt out of the exemption and will hold hearings Jan. 23 at 6 p.m. at the South Learning Center, 4025 Flat Shoals Road in Union City.

According to a Fulton County Schools presentation, the district has an exemption that’s capped at 3 percent or the CPI, and HB 581 is only capped at inflation. 

“Exemptions will perform identically until inflation goes over 3 percent, then the FCS exemption is more beneficial to the taxpayer,” the presentation says. 

– Forsyth County has not made a final decision, but the county commission will receive a recommendation from staff to not opt out of the statewide exemption.

“Any board decision on the matter will determine that, however,” Forsyth Communications Director Russell Brown said. 

– Forsyth County Schools intends to opt out of HB 581 and will hold hearings on Jan. 28 at 6 p.m., Feb. 4 at 6 p.m. and Feb. 11 at 4 p.m. at 1120 Dahlonega Highway in Cumming.

“Our primary goal is to provide a safe, connected, and thriving learning experience for every student in our district,” Mike Valdes, Forsyth County Board of Education chairman, said in a press release. “We want to ensure that any decision we make reflects the values and priorities of our community, which is why hearing from our stakeholders is so crucial.”

– The Johns Creek City Council decided to not opt out of the statewide exemption, meaning it would go into effect in the city. 

“Essentially, [the] council was in consensus to take no action as a homestead exemption is already in place,” Johns Creek Communications Director Bob Mullen said. 

The city has a local floating homestead exemption that was approved in 2018. 

“The council discussed and decided not to ‘opt-out’ to ensure residential homeowners will receive the floating homestead exemption that would be most beneficial to them (either the existing one that was already in place or the one created by HB-581),” Mullen said. 

– Milton also doesn’t plan to opt out of the statewide exemption, “resulting in the City of Milton taxpayers receiving the best possible tax exemption,” Milton City Manager Steven Krokoff said. 

The city has a floating exemption in place that caps property assessments at 3 percent or the CPI, whichever is less, Krokoff added. 

– Roswell has not responded to Appen Media’s requests for a comment and does not have information available, but the city does have a local floating homestead exemption in place. 

– Sandy Springs is in the same situation as the other North Fulton cities and plans to take no action regarding the statewide exemption. 

“We have had a floating homestead similar to HB 581 for many years, so we have no plan to opt out,” Sandy Springs Mayor Rusty Paul said.