In response to rising property tax bills, Georgia voters have agreed to an amendment of the constitution which limits the annual increase in the assessed value of homes to the rate of inflation.
Key Provisions of the Amendment:
Assessment Cap: The tax value of a home cannot be increased each year by more than the inflation rate which is measured using the Consumer Price Index. This limit is valid as long as the owner of the property does not sell it; in the event that the property is sold the assessed value is equal to the market value.
Local Government Opt-Out: Counties, municipalities, and school districts have the ability to opt out of this provision. In order to do so they have to perform certain actions not later than 1st of March, 2025.
Implementation Date: The amendment is scheduled to come into force on 1st of January, 2025.
Implications:
Homeowner Relief: This is their way of protecting the homeowners especially the elderly, and those with fixed income from sudden and enormous tax bills especially when property values are rising.
Potential Revenue Impact: Some of the critics have raised an issue that the capped assessed value increases may impact the revenue of the local governments and the public services including schools which may in turn affect their funding.
Market Dynamics: Such caps have been criticized as possibly causing inequalities in the tax burden between residents who have been living in their homes for an extended period and those who have just purchased new homes, which may in turn affect the housing market.
As an investor in real estate in Georgia it is important to watch how these amendments are going to be implemented by the local governments and what impact it will have on the property values, taxes and investments.