Understanding the distinction between Fair Market Value (FMV) and Assessed Value is crucial for Cobb County property owners, especially when evaluating property tax assessments and considering potential appeals.
1️⃣ Fair Market Value (FMV): The Starting Point
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Definition: Fair Market Value represents the estimated price your property would fetch on the open market under normal conditions. It's the amount a knowledgeable buyer would pay to a willing seller in an arm's-length transaction.
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Determination in Cobb County: The Cobb County Board of Tax Assessors determines the FMV annually, effective as of January 1st each year. They utilize various methods, including:
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Sales Comparison Approach: Analyzing recent sales of similar properties in your area.
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Cost Approach: Estimating the cost to replace the property new, minus depreciation.
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Income Approach: For income-producing properties, this method estimates value based on the property's potential income.
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2️⃣ Assessed Value: The Taxable Amount
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Definition: In Georgia, including Cobb County, the Assessed Value is 40% of the Fair Market Value, unless specified otherwise by law.
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Legal Basis: Mandated by Georgia state law (O.C.G.A. § 48-5-7).
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Calculation:
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🧮 Assessed Value = Fair Market Value × 0.40
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This Assessed Value serves as the foundation for calculating your property taxes.
🧾 Why the Difference Matters for Cobb County Property Owners
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Tax Calculations: Your property taxes are based on the Assessed Value, not the full Fair Market Value.
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Appeals Focus on FMV: If you believe your property taxes are too high, appeals should focus on disputing the Fair Market Value determined by the county. A successful appeal can lower both your FMV and Assessed Value, reducing your tax bill.
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Assessment Notices: Your Cobb County Property Tax Assessment Notice will display both FMV and Assessed Value. Review both figures carefully.
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Homestead Exemptions: Applicable exemptions are deducted from the Assessed Value, further reducing your taxable amount.
📝 In Simple Terms
Think of the Fair Market Value as the full price your house could sell for. The Assessed Value is like a discounted price (40% of the full price) that the tax authorities use to calculate your initial tax liability. Exemptions then further reduce this taxable amount.
📌 Key Takeaways for Cobb County Property Owners
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Understand Both Values: Recognize the difference between FMV and Assessed Value.
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Focus Appeals on FMV: Disputes should target the Fair Market Value assessment.
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Review Assessment Notices Carefully: Ensure both FMV and Assessed Value are accurate.
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Apply for Exemptions: Take advantage of applicable homestead exemptions to reduce your tax liability.
