The property tax bill on my house in DeKalb County increased 32% in 2017. I was astonished, but I was not alone. Many property owners throughout the State of Georgia were shocked to see gigantic increases in their property tax bill in 2017. Why did this happen?
To understand why the bills increased so dramatically, let’s examine Georgia’s property tax system, which is explained in OCGA 48-5-2[i]. The Ad Valorem[ii]Taxation of property system taxes properties according to their value on January 1 of the taxable year. The total property tax bill is calculated by multiplying the fair market value of the property times 40%, then subtracting out any applicable exemptions, and finally multiplying by the applicable millage rates. The final bill owners receive in the mail contains several line items which represent the millage rate for each government entity receiving a portion of the property taxes.
The entire process begins with each County Assessor determining the fair market value of each parcel of real estate in their county. Georgia law defines fair market value as the amount a willing buyer would pay a willing seller in an arms-length transaction. Each County Tax Assessor is required to send an Annual Notice of Assessment to each property owner which states the fair market value of each parcel of real estate on January 1 of the taxable year.
How can property owners mitigate their property tax bill? Upon receipt of the Annual Notice of Assessment, a property owner has 45 days to file a written appeal with the County Tax Assessor’s office challenging the fair market value of their property. The goal of an appeal is to reduce your property tax bill, but you are actually only appealing the fair market value of your property. Remember, the total property tax bill is the assessed value times the millage rate. Therefore, if you can reduce the assessed value, then you reduce your property tax bill.
An appeal must be in writing and you can use Georgia Department of Revenue form PT-311a to file an appeal. Most counties even offer an online appeal form but I recommend you hand deliver a copy of your written appeal to the County Tax Assessor’s Office and get a stamped copy for your personal records.
In conclusion, property taxes fluctuate based on the market value of the property. However, Georgia law gives each property owner a chance to appeal their bill, and thousands of savvy owners take advantage of this system to reduce their property tax bills every year. Do the County Appraisers hate people who appeal? No, the county appraisers work extremely hard to assess the value of each parcel of real estate in their county. They want to get it right, and they understand the appeal process is an important step to make sure the values are accurate and that each property owner is treated the same, whether they live in Brunswick or in Buckhead.
For a more detailed explanation of the property tax system and the appeal process, see these links below.
[i] The Ad Valorem Taxation of Property is explained in the 2nd section of the 5th chapter of the 48th title of The Official Code of Georgia Annotated or OCGA. OCGA is a collection of all laws in the state of Georgia. OCGA was first published in 1861 by Judge Thomas Cobb, a law professor at the University of Georgia and the namesake of Cobb County. In 1861, OCGA was one book containing a comprehensive list of all the laws of the state of Georgia. Today, the Official Code of Georgia contains 53 books, each book commonly referred to as a title. These 53 books are the common backdrop to conference rooms in law offices from Brunswick to Buckhead. Here is a link to the 2016 OCGA: https://law.justia.com/codes/georgia/2016/
[ii] Ad Valorem is Latin for according to value. Under such a system, your property tax bill is determined according to the value of your property. Therefore, the more your property is worth the more your property tax bill will be and vice versa. A law professor I adored would say, “it’s important for lawyers to use Latin; it gives you a rebuttable presumption of intelligence. However, this presumption can be overcome if you open your mouth and say something stupid.”