With the continuing decline of home values many homeowners are now reviewing their property tax assessments. These reviews are resulting in a growing concern to see if their property tax assessments are in line with the true current value of their home. For those of us wondering where our stimulus is, this could be a place to look.
First of all here is a little information on the recent changes on property tax assessments. Governor Sonny Perdue signed a bill into law, effective May 5, 2009, that holds assessed property values at no higher than their current levels, until January, 2011. Georgia Senator Majority Leader Chip Rogers (R-Woodstock), the Senate sponsor of House Bill 233, was quoted as saying, “This new law will provide much-needed stability for Georgia taxpayers. The broken property tax system has not recognized the reality of the market.” This bill prohibits increases in assessment values on all classes of property subject to ad valorem taxation from January 1, 2009 through the second Monday in January of 2011. This bill does not prohibit corrections of any manifest, factual error or omission in the valuation of the property by tax officials pursuant to current Code. Even though the new tax law caps current property values for the purposes of taxation, it does allow for the value of property, and subsequently its tax assessment, to be decreased.
Also, Georgia Municipal Association (GMA), that represents 502 municipal governments in the state of Georgia, issued a News Release about HR1, a proposed Constitutional Amendment to cap annual property assessment increases. If HR1 passes in the House and the Senate it will be voted on by Georgia residents in 2010. HR1 would cap annual assessment increases on residential and non-residential property at 3 percent or the rate of the Consumer Price index (CPI), whichever is less, beginning in 2011.
- Improvements to the property would be assessed at fair market value and added to the capped value.
- In the event that the property was sold or transferred, the property would be assessed for tax purposes at no more than the fair market value, which is defined as no more than the sales price of the property in an arm’s length transaction.
GMA has historically had concerns about artificial limitations on increases in the assessed values of property. Assessment caps artificially suppress the taxable value of property that does not change ownership, resulting in owners of similar properties paying tremendously disparate property taxes. For example in Columbus, which has had an assessment “freeze” on homestead property for more than a quarter of a century, over 16,000 property owners pay less than $50 in local government property taxes, while newer residents in similar properties may pay upwards of $2000. There are numerous unintended consequences of implementing an assessment cap.
- Since many local government costs are beyond the control of the local officials, local governments could be forced to raise millage rates in order to provide the services demanded by voters.
- Increased millage rates combined with a suppressed digest due to assessment caps would likely result in higher than normal taxes on new property owners.
- In states with assessment caps, the caps have proven to be a disincentive to purchasing a larger home as families grow, as well as to downsizing during retirement.
- Given the current housing crisis, the last thing that home buyers and new business need is a higher tax burden compared to their neighbors.
Although property taxes are under the purview of each county tax assessor, the state of Georgia Department of Revenue has a website to answer and help with all property tax questions and requests. If you are still unclear about your next step we encourage you to read Brent Warren’s article, Appealing Your Property Tax Value, and Robert Koppes article, When to Consider an Appraiser. We make these suggestions:
- One of the first things is to get a market analysis for homes similar to yours in your particular subdivision or within a one mile radius of your property. We can easily pull this information for you.
- Another piece of information we can provide through Realist tax service is a list of the comparable homes in your subdivision listing their assessed tax values and the annual tax.
- Consider getting a property appraisal for your property.