Georgia House Bill 581: Navigating the implications for property tax assessments

Georgia has just passed House Bill 581 (HB 581), also known as the “Save Our Homes Act,” which introduces significant changes to property tax regulations for both homeowners and commercial real estate owners and investors in Georgia. Below outlines the residential, commercial, manufacturing, and sales tax impacts, as well as how your property tax consultant should be adjusting their appeal approach to accommodate for these changes:

1. Statewide Floating Homestead Exemption

• Provision: HB 581 establishes a statewide “floating” homestead exemption that limits the annual increase of a home’s assessed value for property tax purposes to the rate of inflation. This measure aims to prevent substantial property tax hikes due to rising property values.
• Property tax consulting implication: Homeowners with existing homestead exemptions will automatically benefit from this provision. Local governments have the option to opt out of this exemption by passing a resolution after conducting three public hearings.

2. New local option sales tax (FLOST)

• Provision: The bill introduces a new local option sales tax, referred to as the floating homestead local option sales tax (FLOST), which local governments can implement to provide property tax relief. This tax can be levied in increments up to 1% and requires approval through a local referendum. The revenue generated is intended exclusively for reducing property taxes.
• Sales tax and property tax consulting implication: Property tax consultants should monitor local referendums for the adoption of FLOST, as it may affect the overall tax burden on properties within those jurisdictions. Sales tax consultants should be aware of this increased levy when analyzing sales taxes paid out by corporations.

3. Procedural changes to property tax assessments and appeals for commercial real estate

Provisions

• Removal of the estimate of current tax based on the previous year’s millage rates from assessment notices