The Georgia House on Thursday backed a measure to cap how much home assessments can go up each year at the rate of inflation in an effort to tamp down property tax increases.
The House voted 164-2 for House Bill 581, which also would allow all local governments to use revenue from a 1-cent sales tax hike to lower property taxes. Some local governments already have similar taxes.
In addition, the House backed a proposed constitutional amendment that would grant all homeowners in Georgia a $2,000 increase in their state homestead exemption. The exemption would lower the taxable value of a homeowner’s property.
The measure now heads back to the Senate for its consideration as the 40th and final day of the 2024 winds down Thursday.
The Senate has on two occasions passed a 3% cap on assessments, but its sponsor, Senate Finance Chairman Chuck Hufstetler, R-Rome, on Thursday didn’t rule out agreeing to the House proposal.
Both chambers have pushed a host of bills to limit assessments, which have skyrocketed in parts of metro Atlanta.
A homeowner’s property tax bill is mostly made up of two elements: the tax rate and the assessed value of the property. School districts, cities and counties have been able to count on a boost in revenue without raising tax rates because the assessed values of homes and businesses in some areas have risen sharply.
Senators say about 75% of what homeowners pay goes to schools, and local governments have been taking in double-digit increases in revenue without raising their tax rates.
The caps on unimproved property assessment increases could mean local governments and school districts would have to raise tax rates, but some lawmakers say at least that would make the process more transparent to homeowners, many of whom don’t understand the values placed on their homes.
Under House Bill 581, local governments could vote to opt out of the cap.
In January, House Speaker Jon Burns’ proposed hiking the homestead exemption from $2,000 to $4,000. At the time, the increase only applied to about one-third of Georgia counties because most already had higher exemptions.
Under the proposal the House passed Thursday, all homeowners would be eligible for the new, higher exemption, if voters approve the proposed amendment in November.