In this troubled economy, it is our hope that the county, and then the state, will correctly show the reduced value of our properties (especially in Clayton County) when calculating our property taxes for 2009. However, I would not depend entirely on the county or the state to properly show the decline in our property values.
Georgia state law assigns the county tax assessor the responsibility for properly valuing all properties in the county, and dictates that every property must be valued at its "fair market value." Fair market values are generally established by the tax assessors, who has been trained as property appraisers.
Since it is not practical to appraise every piece of property every year, assessors generally rely on statistical comparisons of the sale price of property sold, and their "assessed fair market value" of that same property to determine if their previous assessments were reasonable.
From this data, adjustments are made to parcels of property on a street, in a subdivision or in a land lot. It is this statistical method that can lead to misvaluation of property, and what we must be on guard against.
In developing this statistical comparison, only bona fide, "arm's length" transactions are reviewed. So gifts, sales to related parties, distressed sales and sales at less than market value (foreclosures - where there is not a willing seller) are ignored. The effect of a foreclosure of the house next door to you will generally not affect your home's value until the mortgage company, who foreclosed, actually sells the property to a willing buyer.
The information shown below gives you an outline of the process and what to do to make sure your property is properly valued and, therefore, the correct amount of tax is assessed by your county.
As stated above, the tax assessors must complete their work in determining the fair market value of all property. Part of the assessors' work is reviewing and resolving differences in their estimate of "fair market value" and the fair market value claimed by property owners who file a "Real Property Tax Return."
Although Georgia Public Revenue Code provides property owners the ability to adjust their property values via the Real Property Tax Return, few people take advantage of this method. Returns must be filed with the Tax Commissioners Office between Jan. 1 and April 1 each year (some counties are due by March 1).
Returns must be filed if:
· You purchased property during the previous year;
· You made any changes during the previous year that would affect the value of your property, such as building or demolishing a house, remodeling, adding pools and decks, etc.;
· You wish to split or combine parcels;
· You wish the Tax Assessors to review the assessed value of your property.
The Form to file for a change in value, including a reduction in value, is PT-50R , which you can fill out online and print out for filing. It can be found at: http://www.etax.dor.ga.gov/ptd/adm/forms/pt50r/LGS_TAXPAYERS_RETURN_OF_REAL_PROPERTY_PT50R.pdf.
Go to the following site to get the information on your county for addresses and the date required for filing: http://www.etax.dor.ga.gov/ptd/adm/forms/pt50r/index.aspx.
In Clayton County, they will put this data on a different form, so you will need to take it to the tax office and have them transfer the data. Other counties may have similar processes, so you need to check with your county to see how it needs to be done.
The hard part of the process is what value to put down as the current year FAIR MARKET VALUE, because it must be supported by some readily available data.
There are several ways to go about gathering this information. There are several web sites that provide help in this area, they include www. zillow.com (there are many other sites that can be used if you Google "home value.")
Please remember that a claim of lower value has virtually no effect unless you have documentation to support your position. Without documentation, it is difficult to overcome the value set by a trained assessor.
After valuations are completed, they are assembled into one document called the tax digest and notices are mailed to each property owner notifying them of any change in the value of their property. It is critical that you pay attention to this "assessment" notice, because you have a time limit in which to protest, if you do not agree with that value.
If you chose to protest the value, you must have a basis for protest and evidence that will support your position. The tax digest is also sent to the state, who must give final approval to the "fair market values" contained in the digest before the county can calculate and mail any tax bills.
The rate of tax (known as the "millage") is established by the County Board of Commissioners for all but school purposes, and the school rate is set by the Board of Education.
Finally, after all appeals are resolved, the property tax bills are calculated, prepared and mailed by the tax commissioner, who is also responsible for the collection of the tax.
While we encourage you to monitor the value of your property to be sure it is reasonable, remember that state law provides that only 40 prcent of "fair market value" of property is taxed. Various exemptions, such as a homestead exemption, are applied to further reduce the taxed value before the millage rate is applied to arrive at the tax bill. This means a $10,000 reduction in the value of your property would result in a taxable value reduction of $4,000.
Ben Loggins is a local certified public accountant, who is also a former Internal Revenue Service agent and instructor.