Summary
All Georgia residents who own residential or commercial property pay property taxes. Georgia Amendment 1 would allow counties to reduce the amount of property taxes that a homeowner pays on their primary residence. The amendment is limited to jurisdictions that don’t already have a homestead exemption in place. The exemption would be effective if personal property taxes increase faster than inflation. Counties, consolidated governments, municipalities, or local school systems will be allowed in early 2025 to opt out of allowing the exemption for their residents.
Fiscal Impact
The amendment allows the state to create an exemption. Allowing the General Assembly to create an amendment does not have any fiscal impact. If the exemption is created, the size, structure, and number of local governments that opt out will determine the fiscal impact.
Proponents’ Arguments
Proponents argue that Georgia residents need relief from rising property taxes. Some counties have seen property taxes increase by 50% over five years, which means that, even with a steady tax rate, those residents are paying 50% more in taxes.
State Representative Beth Camp (R-Lamar), one of the bill’s cosponsors, stated:
“This bill should help homeowners by allowing incremental, measured increases (or decreases) in property values rather than the sweeping dramatic ones seen over the past few years. It also provides uniformity in application—everyone in the area impacted has the same CPI applied to their homes.”
Opponents’ Arguments
There were no arguments against the bill. While 11 Democratic senators voted against the bill, none of them provided public reasoning for their decision. One of the bill’s sponsors was a Democrat.
Discussion
Homestead tax exemptions are widespread across the United States and Georgia. Georgia counties have regularly approved homestead tax exemptions even when it is clear that other taxes will increase as a result.
While tax cuts are almost always a good thing, since this amendment would only apply to homeowners and not to other property owners, including commercial properties and rental properties (and therefore renters), it’s not the most effective or fair way to cut taxes. A statewide cut in property taxes would be fairer. Additionally, an across-the-board cut would not suffer the same economic distortions that arise from only cutting taxes for one targeted group of residents.
Further, the property tax cuts may not lead to increased revenue over time. While property tax revenues are projected to rise in some Georgia counties, even with millage rate rollbacks, others are losing population, and it is unlikely that the property tax exemption by itself would change this trend.
However, arguments that the Georgia amendment would reduce local government revenues are not true. The Homestead Property Tax Exemption only adjusts the homestead exemption for inflation, so it reduces the rate of increase in revenue for local governments but does not reduce their revenues.
Third, Georgia already offers multiple state homestead exemptions:
- The Standard Homestead Exemption, which provides a $2,000 deduction from the assessed value of the primary residence for county and school taxes;
- Individuals aged 65 and older may claim a $4,000 exemption from all county ad valorem taxes if their income is below $10,000 per year;
- Individuals aged 62 and older may claim an additional exemption for taxes with educational purposes (including to retire school bond debt), if the individual’s income is below $10,000;
- Individuals aged 62 and older may claim the Floating Inflation-Proof Exemption allowing for an exemption based on increases in the home’s value if the home has increased in appraised value by $10,000 or more and;
- Disabled veterans or their surviving spouses are eligible for exemptions as well as surviving spouses of U.S. service members or peace officers/firefighters killed in the line of duty.
Thirty-six of the 159 Georgia counties, including the five most populated, offer countywide homestead exemptions.