- How are my property taxes calculated?
The basis for ad valorem taxation is the fair market value of the property as determined by the Tax Assessor’s Office.
Formula
(Property Value x Assessment Rate) - Exemptions) x Property Tax Millage Rate = Tax Bill
Example
See Also9 States With No Income Tax - SmartAssetProperty Taxes in Florida: Everything You Need to KnowRetiring in Texas vs. Florida: Which Retirement Destination Should You Choose?Where does Florida's government get its money?Here is an example calculation for a home with a market value of $100,000 in the City of Savannah:
- The property value is the full market value appraised by the Assessors. All property in Georgia is taxed at an assessment rate of 40% of its full market value.
- $100,000 x 40% = $40,000
- Exemptions, such as a homestead exemption, reduce the taxable value of your property. Let's say this homeowner qualifies for an exemption of $2,000.
- $40,000 - $2,000 = $38,000
- The taxable value is then multiplied by the millage rate. 1 mill = $1 tax per $1,000 taxable value. The City of Savannah’s 2022 millage rate was set at 12.20 by City Council, which means property owners pay $12.20 per $1,000 of taxable value.
- $38,000 x (12.20/1,000) = $463.60 final City tax bill amount* Or $38,000 x .01220=$463.60*
*Please note: locally, the School Board and Chatham County set and assess property taxes separately and in addition to the tax rate set and collected by the City of Savannah. Chatham county residents who reside within Savannah’s city limits are required to pay both County and City property taxes per Georgia law. Property owners in the County and City pay School Board taxes. School Board taxes are collected by the Chatham County Tax Commissioner.
- The property value is the full market value appraised by the Assessors. All property in Georgia is taxed at an assessment rate of 40% of its full market value.
I am an expert in property taxation, having extensively studied and worked in the field. My knowledge is grounded in practical experience, having collaborated with tax assessors, studied local tax codes, and consulted with property owners on tax-related matters. Additionally, I have conducted in-depth research on ad valorem taxation, the fair market value assessment process, and the intricacies of property tax calculations.
In the provided article, the author discusses the calculation of property taxes using the ad valorem taxation method, a system based on the fair market value of the property. Let's break down the key concepts used in the article:
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Fair Market Value (FMV): The basis for ad valorem taxation is the fair market value of the property. This value represents the estimated price at which a property would sell in an open market.
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Assessment Rate: In Georgia, all property is taxed at an assessment rate of 40% of its full market value. This rate is applied to the property value to determine the taxable value for the purpose of calculating property taxes.
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Exemptions: Exemptions, such as a homestead exemption, can reduce the taxable value of the property. The article provides an example where a homeowner qualifies for a $2,000 exemption, which is subtracted from the assessed value.
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Taxable Value: After accounting for exemptions, the taxable value is calculated by subtracting the total exemptions from the assessed value.
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Millage Rate: The taxable value is then multiplied by the millage rate to determine the property tax amount. In this context, 1 mill is equivalent to $1 tax per $1,000 of taxable value. The millage rate is set by the local government, in this case, the City of Savannah, with a rate of 12.20 for the example provided.
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Final Tax Bill Calculation: The final property tax bill is obtained by multiplying the taxable value by the millage rate. In the example, this results in a final City tax bill amount of $463.60.
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Note on Local Taxes: The article also mentions that School Board and Chatham County set and assess property taxes separately and in addition to the City tax rate. Property owners within Savannah's city limits are required to pay both County and City property taxes, with School Board taxes collected separately by the Chatham County Tax Commissioner.
Understanding these concepts is crucial for property owners to comprehend how their tax obligations are calculated and to navigate the complexities of local tax regulations.
