Why Do Property Taxes Go Up Or Down?

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Many homeowners and potential home buyers wonder why their property taxes might go up or down in a given year.  This question is asked pretty frequently these days, especially as  homeowners see the value of their home drop and the size of their property tax bill increase.  Just read an interesting email from Atlanta-based real estate attorneys Neel and Robinson that addresses the issue. If you’d like a quick succinct answer, give it a read.

Even if the assessment on a property has stayed the same or even dropped, it is still possible to have a higher tax bill than last year.

  1. County and city homestead exemptions may have been removed, especially if the property was foreclosed or vacant before January 1st.  Any new owner as of January 1st must qualify and file for all exemptions;
  2. Other exemptions for low income, elderly or disabled status, or veteran status may have dropped off;
  3. The state homestead exemption (called the Homeowner Tax Relief Grant) was eliminated for 2010, and this exemption was worth $200-$400 on a typical property (if it also qualified for the county and city homestead exemptions).  This exemption was removed by House Bill 143, which states that the exemption will only be provided when the state has the necessary surplus in its budget;
  4. Cities and counties review and revise their millage rates each year based on their budget needs, so the same assessment with the same exemptions could still have a higher (or lower) bill;
  5. If the homestead exemption(s) are new to the property, the bill could be much lower than previous years, depending on other changes to the assessment and millage rate.

There is also a new change to the Georgia law that was passed on June 7, 2010, and will affect all bills beginning in 2011.  Here are some highlights of Ga. Senate 346:

  1. Every property owner will receive an Annual Notice of Assessment and the right to appeal;
  2. Every Notice of Assessment must contain the estimated property tax (in dollars);
  3. Appeal period has been standardized and extended to 45 days;
  4. Automatic taxpayer victory on the appeal if no government response within 45 days;
  5. All relevant sales, including distress sales, must be included in determining the FMV (fair market value) of the property;
  6. Sales price establishes the FMV for the next tax year;
  7. Only the current use of the property may be used in establishing the FMV (does not matter if it has commercial or development potential);
  8. Taxpayer will have access to all data used in determining FMV;
  9. There will be an alternative streamlined appeal process for properties valued over $1,000,000.
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