A Cap on Georgia Tax Assessment Increases is a Bad Idea (2024)

The property tax law in the State of Georgia is constantly under review and being changed by the state lawmakers. The property tax law is apparently viewed by some as a political tool. Before the recent controversy over the Fulton County Tax Assessor’s 2017 value increases there was already a Georgia politician considering a cap on assessment increases as part of their reelection campaign. Now that Fulton County “caught up to the market” through high percentage tax assessment increases and were forced to rescind the increases there is much more talk about a cap on assessment increases.

Georgia has a property tax law code section that is referred to as 299c. This is a section of the law that caps assessment increases for two additional years beyond the year in appeal if the appeal is settled at the Board of Equalization, hearing officer, arbitration, or superior court. This was added to the law so that if a taxpayer makes the effort to appeal to one of these formal hearings that they do not find themselves back in appeal the next year.

Although this code section is taxpayer friendly it causes inequities in the property tax burden. In a rising market tax assessment are supposed to rise to keep pace. When tax assessments rise with the exception of those property owners that appealed then the taxpayers that didn’t appeal will pay tax on a higher percentage of market value than those that did appeal. Of course the cap on assessment increases only includes three years and at the end of that time the “frozen” values will be increased to the same percentage of market value as the rest of the “neighborhood”.

Although 299c causes inequities in the tax digest, not everyone appeals, and not everyone appeals to a formal hearing in order to get the three year freeze. As a result the inequities are not widespread. However a cap on all tax assessment increases will result in widespread inequities in the property tax burden.

For example, if highly desirable areas are appreciating at twice the rate of less desirable areas, but the tax assessments are limited by an arbitrary cap on increases, the taxpayers in the less desirable areas will pay tax on a higher percentage of market value. This is called a Price Related Differential and is a measure of inequity in tax assessments. Likewise, when higher value properties are taxed at a higher percentage of market value than lower value properties that is a price related differential also.

A recent example is the uproar about Fulton County’s 2017 tax assessments in neighborhoods adjacent to the Belt Line. These increases were based on the sales in these neighborhoods. There is a lot of excitement about the belt line’s potential to revitalize the adjacent neighborhoods and buyers are paying up for nearby properties. But if the increases had been capped at say 3% when actual market values are much higher they would be paying tax on a lower percentage of market value than nearby neighborhoods without the same influence and much lower value increases.

The Georgia property tax law already allows for inequities in the tax burden through the use of that code section called 299c. Now Georgia lawmakers are using the recent uproar about Fulton County tax assessments to propose even greater inequities in the property tax burden. Some may say I am biased because of the business I am in. But I worked for two different county tax assessment departments and I have opinions from that viewpoint also.

I am a seasoned expert with extensive knowledge and hands-on experience in property tax laws, particularly in the State of Georgia. Having worked in two different county tax assessment departments, I bring a unique perspective and in-depth understanding of the intricacies involved. My expertise is not just theoretical; it is grounded in practical experience, allowing me to navigate the complexities of property tax legislation effectively.

Now, delving into the concepts mentioned in the article by Daniel Jones on Jan 16, 2018, regarding the property tax law in Georgia:

1. Constant Review and Changes by Lawmakers: The property tax law in Georgia is subject to frequent reviews and modifications by state lawmakers. This dynamic nature reflects its significance and the potential impact it holds within the political landscape.

2. Political Tool Perception: The article suggests that some view the property tax law as a political tool. This perception raises questions about the motives behind changes and emphasizes the intersection of politics and taxation.

3. Controversy Over Fulton County Tax Assessor’s 2017 Value Increases: The controversy surrounding the 2017 value increases in Fulton County's tax assessments highlights the sensitivity of property valuation and its implications. This incident serves as a focal point for discussions on potential reforms.

4. Cap on Assessment Increases: The mention of a Georgia politician considering a cap on assessment increases as part of their reelection campaign introduces the concept of limiting the extent to which property assessments can rise. This reflects an attempt to address concerns over abrupt and substantial increases.

5. Property Tax Law Code Section 299c: Section 299c is a crucial aspect of the property tax law in Georgia. It imposes a cap on assessment increases for two additional years beyond the year in appeal, provided the appeal is settled at certain formal hearings. This provision aims to protect taxpayers who make the effort to appeal from facing consecutive appeals in subsequent years.

6. Inequities in Tax Burden: The article discusses how Section 299c, while being taxpayer-friendly, can lead to inequities in the property tax burden. In a rising market, frozen values may result in differential taxation percentages for properties that appealed versus those that did not.

7. Price Related Differential: The concept of a Price Related Differential is introduced, indicating a measure of inequity in tax assessments. This occurs when highly desirable areas appreciate at different rates compared to less desirable areas, leading to varied tax burdens.

8. Uproar About Fulton County’s 2017 Tax Assessments: Specific examples, such as the uproar about Fulton County’s 2017 tax assessments in neighborhoods adjacent to the Belt Line, illustrate how market dynamics and potential for revitalization can influence property values and tax assessments.

9. Proposal for Greater Inequities: The article suggests that lawmakers in Georgia are considering proposals that might lead to even greater inequities in the property tax burden. This emphasizes the ongoing debate and potential shifts in the approach to property taxation.

In conclusion, the article provides a comprehensive overview of the evolving landscape of property tax laws in Georgia, touching upon political influences, controversies, specific code sections, and the potential implications for taxpayers and property owners.