The Georgian lawmakers have approved a new amendment to their legislation that would curb the increase in property tax.
A set of laws that Georgia lawmakers think would prevent increases in property taxes received final passage on Thursday. This could be the Republicans’ biggest tax-cutting attempt of the 2024 session. A state constitutional amendment among the proposals will be approved only if the voters approve it in a referendum held in November.
The New Amendment By Georgian Government
The new law would restrict annual increases in a home’s assessed value for property tax purposes to the inflation rate unless a local school board, county government, or city government chooses to opt out in early 2025 through a one-time escape hatch. Chuck Hufstetler, the Rome Republican and Senate Finance Committee Chairman, mentioned it as a tremendous piece of tax legislation to relieve taxpayers in the short term and gradually in the long term to keep their taxes down.
Legislators claim it would stop governments from raising taxes in “back door” ways by keeping tax rates from falling, therefore keeping more money in their own pockets when property values rise. One of the main complaints that rank-and-file lawmakers receive from voters, according to many of them, is their growing property tax payments. According to statistics, Georgia’s total property tax revenue increased by 41% between 2018 and 2022, while the state’s total assessed value increased by over 39%. These numbers include both newly constructed and existing properties.
House Bill 581 and House Resolution 1022 easily gained the necessary two-thirds majority in both the House and the Senate. County and city lobby groups have approved the legislation. School boards continued to reject it, citing concerns that the cap may eventually deprive schools of critically needed funding. This is particularly true of school districts, as they can’t raise tax rates above a certain amount as it limits their capacity to acquire more funds.
Georgia is by no means the only state where lawmakers are responding to voter dissatisfaction with increased levies. Throughout the past year, the topic has taken center stage in Texas, Kansas, Colorado, and Pennsylvania, among other states.
The House members had proposed allowing governments to choose to opt in, whereas the Senators wanted to mandate the caps for everyone who doesn’t have a more restrictive cap. Until March 1, 2025, local governments and school districts can choose whether to participate in the current idea. However, the cap would then apply to any local government or school district that remained in the plan after that. The homestead exemption for homeowners will last as long as they own their homes. Upon sale, the assessed value of a home will be reset to market value.
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Lawmakers also approved the proposal to raise the statewide homestead tax exemption, backed by House Speaker Jon Burns. Republican Burns of Newington has suggested raising the sum from $2,000 to $4,000. Due to the reduction in taxable value, some homeowners may save $100 a year on their tax bills as a result of the adjustment. However, evidence has indicated that it might only apply in one-third of Georgia’s 159 counties. Most counties currently have bigger local exemptions that do not include the state exemption. A few countries already carry out the bill’s new provision allowing governments to raise sales taxes by one penny for every dollar of sales, which is used to replace property taxes.
Republicans Take On The New Law
Republicans in Georgia have long argued that allowing bills to increase even as tax rates remain the same is equivalent to a backdoor tax increase. They have also urged local governments to reduce tax rates to keep bills level when valuations rise. According to the Association of County Commissions, at least 39 Georgia counties, 35 cities, and 27 school systems have adopted local laws limiting how much-assessed values can rise. Only homeowners 65 and older are eligible for such limits.