Property Tax Reform Becomes Law

Posted on June 9, 2010 by Kevin Caiaccio

The overhaul of Georgia's property tax system became law when signed by Governor Sonny Perdue last Friday, June 4.  As discussed previously on this blog, Senate Bill 346 is a taxpayer-friendly bill designed to create a more fair and transparent system of assessing property tax values.

As stated in the press release:

The overall reform includes more than 50 changes to current state law. Significant taxpayer friendly provisions include:

  • Requirement that every property owner receive annual Notice of Assessment, which guarantees right to appeal;
  • Every Notice of Assessment must contain estimated property tax
  • Expansion of appeal time-period from 30 to 45 days
  • Alternative streamlined appeal option for property valued in excess of $1,000,000
  • Automatic taxpayer victory on appeals when government fails to respond within 45 days
  • Requirement that all relevant sales, including distress sales, be included when determining Fair Market Value
  • Requirement that only “current use of property” be used in determining Fair Market Value
  • Taxpayer must be given access to all data used in determining Fair Market Value
  • Sales price establishes Fair Market Value for next tax year

The full text of the new law, most of which goes into effect on January 1, 2011, can be viewed here. 

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Property Tax Reform Unanimously Passes Georgia Senate

Posted on March 15, 2010 by Kevin Caiaccio

Last Thursday, the Georgia Senate unanimously passed property tax reform which is designed to restore taxpayers' confidence in the fairness of the system of assessing property values.  The bill, which was introduced by Sen. Majority Leader Chip Rogers, will require that an assessment notice be sent to property owners every year.  The current system requires a notice only when the assessed value changes.

The version which passed the Senate was changed from the initial draft as previously summarized on this blog in the following respects:

  • The taxpayer will have 45 days to appeal the proposed assessed value.  As I previously commented, the initial proposal of one year was unworkable.
  • The requirement that an increase in value must be unanimously approved by the board of equalization was removed.
  • The annual notice will include a pro forma estimate of the current year's taxes based on the prior year's millage rate.
  • There is a more detailed definition of "arm's length, bona fide" sale which specifically includes distress sales, short sales, REO sales and foreclosures.
  • The county's tax digest may be approved even if taxpayers' appeals are pending.

I believe that this is a good bill which will lead to a more transparent and accurate system for assessing property values.  Georgia property owners are currently paying taxes based on assessments which often do not reflect declining values.  Under the proposed new system, assessed values should fall more in line with market prices.  The downside is that  local governments will face the challenge of either raising millage rates or finding other sources of revenue to make up for lower tax receipts.

The bill now moves to the State House for further consideration. 

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Major Property Tax Reform Proposed in GA Legislature

Posted on February 11, 2010 by Kevin Caiaccio

Last week, Senate Majority Leader Chip Rogers introduced a major overall of the property tax system in GA.  Senate Bill 346 (PDF) was drafted in response to the perceived unfairness which has resulted from falling home values.  Despite the significant drop in property values, assessments for tax purposes have remained artificially high.  This problem was well documented in a thorough report in the AJC late last year.

The comprehensive bill proposed by Sen. Rogers includes over 40 changes to the property tax system and will have a major impact on GA property owners.  Some of the highlights of the bill are as follows:

  • Requires the county to send annual assessment notices on all properties along with information on how to file an appeal.  The current system only requires a notice if the assessed value is changing.
  • Allows the property owner to file an appeal up to one year after receiving the assessment notice. This is probably one of the more controversial provisions of the bill.  Current law requires the owner to file an appeal within 30 days.
  • Requires unanimous approval by the Board of Equalization to approve a value higher than that claimed by the property owner.
  • Requires that the market value for tax purposes not exceed the sales price for the first year after an arms-length sale of the property.

 My initial thoughts on this bill are as follows:

Pros:   would create a more consistent, objective and fair system by shifting some power to the homeowners;  would simplify the tax appeals process.

Cons:  would increase administrative costs to counties; would likely result in reduced revenues unless the counties take the unpopular step of raising millage rates; could delay the approval of the tax digest and make budgeting more difficult;  could hurt schools which derive much of their revenue from property taxes.

Bottom Line:  I like the fundamental policy objectives of this bill, but some of the finer points will need tweaking. 

Sen. Rogers has indicated that the bill will not be fast tracked and that he is seeking wide input on the bill.  As result, the proposal will likely go through many iterations before reaching the Governor's desk. 

Because of the significance of these changes and the impact on GA property owners, I will continue to monitor this bill and provide updates as warranted.

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