Georgia House Bill 581 (HB 581), enacted in 2024, introduces significant reforms to the state's property and local sales tax systems, primarily through the establishment of a statewide floating homestead exemption. Home - Gwinnett County Public Schools+4ACCG+4Georgia General Assembly+4
Floating Homestead Exemption:
This exemption limits the annual increase in a homesteaded property's assessed value to the rate of inflation, as determined by the Consumer Price Index (CPI). For example, if a property's assessed value is $100,000 and the CPI indicates a 2% inflation rate, the assessed value for tax purposes would increase to $102,000 the following year. Decatur, GA+2Georgia General Assembly+2Home - Gwinnett County Public Schools+2Decatur, GA
Optional Sales Tax for Property Tax Relief:
HB 581 authorizes local governments to implement an optional 1% sales and use tax dedicated exclusively to offsetting property taxes. To enact this tax, counties and municipalities must:Decatur, GA+3Georgia General Assembly+3cityoflilburn.com+3
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Implement an ad valorem property tax exemption, such as the floating homestead exemption.ACCG+4Georgia General Assembly+4Home - Gwinnett County Public Schools+4
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Enter into an intergovernmental agreement detailing the distribution of tax proceeds.Home - Gwinnett County Public Schools+2Georgia General Assembly+2Decatur, GA+2
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Obtain voter approval through a referendum.Georgia General Assembly+1ACCG+1
The tax can be levied for up to five years, with the possibility of renewal following the same procedures. Georgia General Assembly+1Decatur, GA+1
Property Tax Process Reforms:
The bill introduces several changes to the property tax assessment and appeals process:ACCG+1Home - Gwinnett County Public Schools+1
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Assessment Notices: Assessment notices must now include an estimate based on the current year's roll-back rate, replacing the previous year's millage rate estimate.Cobb County+3Georgia General Assembly+3ACCG+3
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Property Appraisals: Properties are required to be appraised at least once every three years.Georgia General Assembly
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Appeals Process: If a property's value is reduced upon appeal, the new value is locked for three years. Georgia General Assembly
Implementation and Opt-Out Provisions:
HB 581 took effect on January 1, 2025, for all property owners with a homestead exemption. Local governing authorities, including counties, municipalities, and school boards, have the option to opt out of the floating homestead exemption by:ACCG+2cityoflilburn.com+2Decatur, GA+2
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Advertising and conducting three public hearings expressing intent to opt out.Decatur, GA
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Adopting a resolution to opt out.Decatur, GA
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Filing the resolution with the Secretary of State by March 1, 2025.Decatur, GA
Failure to meet these procedures results in the exemption remaining effective. Decatur, GA
Impact on Local Revenues:
While HB 581 provides tax relief to homeowners, it may reduce the growth of property tax revenues for local governments and school districts. For instance, Gwinnett County Public Schools estimate a potential loss of $35 million in local revenue for the fiscal year 2025-26 due to the limitation on property tax assessment increases. cityoflilburn.com+5Home - Gwinnett County Public Schools+5Decatur, GA+5
Overall, HB 581 aims to balance property tax relief for homeowners with the fiscal needs of local governments by introducing mechanisms like the floating homestead exemption and optional sales tax provisions.Home - Gwinnett County Public Schools+4Georgia General Assembly+4ACCG+4
