Knowing Your Rights About Property Tax Assessments Could Save You Money
In most Georgia counties, the deadline for paying real property ad valorem taxes occurs in December of each year; however, many Georgia property owners are not aware of certain opportunities, which occur much earlier in the year, that they can use to potentially reduce their property tax burden.
Ad valorem taxes are generally assessed on each parcel of land in the State. These taxes substantially impact family budgets, real estate rental values, and even the cost of goods sold by local business owners. The actual amount of property taxes is primarily dictated by two factors: millage rates and assessed values.
The millage rate is the amount per $1,000.00 of assessed value that a parcel of property is taxed. For example, if the millage rate is $5.00, then property with an assessed value of $100,000.00 will be subject to $500.00 in ad valorem taxes (less any applicable exemptions, etc.) Millage rates are variable, and each local government's governing board establishes the millage rate that will be assessed to property owners in their jurisdiction that year.
Assessed values are determined by a County's Board of Tax Assessors, which operates under the oversight of the Georgia Revenue Commissioner. Each Board of Tax Assessors is required to determine the fair market value of all of the real property within the county on an annual basis. The property valuations are performed by County employed appraisers for the specific purpose of determining assessed values, and Georgia law requires that the assessments be performed uniformly and equally within the county.
Given the relationship between millage rates and assessed values, it is not uncommon for local politicians to reduce the millage rate and laud their decision as a "tax cut", when a corresponding increase in assessed values by the county's appraisers actually results in a significant tax increase for its citizens. In an effort to create a check-and-balance on the potential for County Commissioners and Assessors to manipulate correlation between millage rates and assessed values, the Georgia legislature provides property owners with tools to challenge the assessed value of their real property.
Georgia law defines "fair market value" as "the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm's length, bona fide sale"; in virtually every Georgia county and municipality "assessed value" is 40% of that fair market value. Consequently, the linchpin of properly assessing a parcel of property is to accurately determine its fair market value.
County assessors do not have the resources or manpower to individually appraise each piece of property on an annual basis; instead, they must rely on categorical "group" assessments to determine assessed values. However, all property owners know that the fair market value of land can be influenced by countless factors, and often those factors will not be accurately reflected in the "group" assessment model used by County assessors.
In recognition of this fact, the Georgia legislature adopted a statute specifically allowing every Georgia owner to file a real property tax return on or before April 1st of each year to assert a fair market value for his/her property; although the Board of Assessors is not required to accept the value set forth in the return, it must be considered by the Board when it issues its final assessment. This is an important first step for an owner to establish and, if necessary, challenge the assessed value of his/her property.
Regardless of whether a real property tax return is filed, in April of each year the Board of Assessors sends a "Notice of Assessment" for each property parcel to its owner. The notice is not a bill–only a statement of the proposed fair market value, assessed value, and estimated tax. A property owner then has 45 days from the date of the Notice of Assessment to file an appeal to challenge the property valuation.
After an appeal is filed, the matter is typically referred to the Board of Equalization ("BOE"), which is designed to operate as an independent panel that holds hearings on valuation disputes between county assessors and property owners. Property owners are allowed to attend the hearing and present evidence, including live testimony of real estate experts, to challenge the County's assessment of value. If a property owner is dissatisfied with the ruling of the BOE, Georgia law allows him/her to file an appeal to the Superior Court within 30 days of the date of the BOE's ruling. Georgia also has a statute whereby taxpayers are able to recover their attorney's fees and court costs from the county when they prevail in Superior Court.
Georgia homeowners, business owners, property developers, and other individuals are often impacted by inaccurate property tax assessments, and the Board of Assessors has a statutory obligation to fairly and accurately determine the fair market value of each parcel of property that is subject to taxation. As such, property owners should educate themselves and talk to their professional advisors about the details of the concepts addressed in this article, so that they can better protect their property rights, and their wallets.
David L. Walker, Jr. is a partner with Flint, Connolly & Walker, LLP. He focuses his legal practice to collaborate with business owners, mid-sized and closely held corporations, as well as real estate owners, developers, and contractors. David has a depth of knowledge in the areas of construction law, contracts, probate law and estate administration, and various matters related to the business operations of employers and business owners.