Today I want to talk about an often misunderstood form, the Georgia Taxpayer’s Return of Real Property. This time of year, prior to April 1, real estate “experts” start telling everyone (on radio, over email) that you need to return this form to tell the tax assessor what you think your property is worth. There is an urgency about these claims, because the deadline to file this form is indeed April 1. Some of them claim that you need to do this to appeal the tax assessor’s value.
The taxpayer’s return of real property form is an antiquated tool in the property tax law that is used to “discover” taxable property. Basically if you build a house or a barn you are supposed to “tell” the tax assessors about this by filing this form. If you finish an unfinished basement you are supposed to report the improvement to your property on this form. The bottom line is if you make changes to real estate that results in an increase in your property value you need to report the change on this form, or if the tax assessors later discover this improvement for themselves they can penalize you for not reporting it.
If you get a building permit for work that is being done on your property, the tax assessors will get a copy of it. If they do not follow up on the improvement reported on the building permit and it is discovered in a later tax year, there is little chance they will penalize you for it even if you forgot to file a return. If you do work on your property that requires a building permit, but you don’t bother to get one and you don’t file a return there is a greater chance that you may be penalized. In my experience at Fulton County, improvements were often added based on a field inspection but there was no effort to go back and determine whether a building permit was pulled or a property tax return was filed. We just added the improvement value in the year it was “discovered”.
The Georgia property tax law was cleverly written so that the tax assessors don’t need to receive a return from every real estate owner in the county every year. Even though the “talking heads” out there are telling you to file a Georgia Taxpayers Return of Real Property, the law is written so that if you don’t return this form by April 1, then you have, in effect, returned your taxable value from the previous year. Some will say that you need to file this anyway and return a lower value, as if this is the same as filing a property tax appeal, but it is not. The tax assessors don’t have to accept your returned value and often do not.
Prior to 2010 the Georgia Taxpayers Return of Real Property form was used to force the tax assessors to send you a property tax assessment notice that you could appeal. This is because the tax law says that before you can appeal your taxable value the tax assessors must first send you an assessment notice. If you returned a value of $50,000 and your property is actually worth $100,000 then the assessors would reject your return and send you a tax assessment notice at $100,000 which gave you the right to appeal. This was written into the tax law because there was no requirement that the tax assessors send everyone a tax assessment notice every year. This prevented the tax assessors from abusing this rule by simply not sending you a notice so that you couldn’t appeal.
This use of the Georgia Taxpayer’s Return of Real Property is no longer needed because the tax law changed in 2010 with Senate Bill 346. During the height of the financial/housing crisis the Georgia political leadership changed the law so that the tax assessors had to send every real property owner a property tax assessment notice every year. This means that unless you have improved your real estate and think you need to report the value on the taxpayer return form, returning this form by April 1 is a waste of your time. If you don’t agree with the tax assessors value you will get a tax assessment notice in the April – July time frame every year, and you will have 45 days from the date of the notice to appeal the value at that time.