Several types of homestead exemptions have been enacted to reduce the burden of ad valorem taxation for Georgia homeowners. These exemptions apply to homestead property owned by a taxpayer and occupied as his or her legal residence. Some exceptions to this rule apply.
To receive the benefit of the homestead exemption, the taxpayer must file an initial application with the tax commissioner’s office. The homestead application is normally filed at the same time the initial tax return for the homestead property is filed.
Once granted, the homestead exemption is automatically renewed each year. The taxpayer does not have to apply again unless there is a change in ownership of property or the taxpayer seeks to qualify for a different kind of exemption.
Under the authority of the state constitution, several different types of homestead exemptions are provided. In addition, local governments are authorized to provide for increased exemption amounts and several have done so. The tax assessor’s office can answer questions regarding the standard exemptions as well as any local exemptions that are in place.
The local county exemptions supersede the state exemption amount when the local exemption is greater than the state exemption.
HOMESTEAD EXEMPTION FILING DATES
Effective June 1, 2005, homestead exemptions may be filed for any time during the year. However, exemptions must be filed for by April 1 to apply to the current tax year. You must still own and occupy the property as of January 1 to be eligible.
- Standard Homestead Exemption
The home of each resident of Georgia that is actually occupied and used as the primary residence by the owner may be granted a $4,000 exemption from state, county, and school taxes except for school taxes levied by municipalities and except to pay interest on and to retire bonded indebtedness. The $4,000 is deducted from the 40% assessed value of the homestead. The owner of a dwelling house of a farm that is granted homestead exemption may also claim a homestead exemption in participation with the program of rural housing under contract with the local housing authority. (O.C.G.A 48-5-44)
- Individuals 65 Years of Age and Older May Claim a $30,000 Exemption
Individuals 65 years of age or over may claim a $4,000 exemption from all state and county ad valorem taxes if the income of that person and his spouse does not exceed $15,000 for the prior year. Income from retirement sources, pensions, and disability income is excluded up to the maximum amount allowed to be paid to an individual and his spouse under the federal Social Security Act. The social security maximum benefit for 2010 is $55,742. The owner must notify the tax assessor’s office if for any reason they no longer meet the requirements for this exemption. (O.C.G.A. 48-5-47)
- Individuals 62 Years of Age and Older May Claim an Additional Exemption
Individuals 62 years of age or over that are residents of each independent school district may claim an additional exemption from all ad valorem taxes for educational purposes and to retire school bond indebtedness if the income of that person and his spouse does not exceed $10,000 for the prior year. Income from retirement sources, pensions, and disability income is excluded up to the maximum amount allowed to be paid to an individual and his spouse under the federal Social Security Act. The social security maximum benefit for 2010 is $55,742. The owner must notify the tax assessors office if for any reason they no longer meet the requirements for this exemption. This exemption may not exceed $10,000 of the homestead’s assessed value. (O.C.G.A. 48-5-52)
- Floating Inflation-Proof Exemption
Individuals 62 years of age or over may obtain a floating inflation-proof state and county homestead exemption, except for taxes to pay interest on and to retire bonded indebtedness, based on natural increases in the homestead’s value. If the appraised value of the home has increased by more than $10,000, the owner may benefit from this exemption. Income, together with spouse or any other person residing in the house, can not exceed $30,000. This exemption does not affect any municipal or educational taxes and is meant to be used in the place of any other state and county homestead exemption. (O.C.G.A. 48-5-47.1)
- Homestead Exemption for Disabled Veterans
Any qualifying disabled veteran may be granted an exemption of $50,000 from their assessed value for property taxes by state, county, municipal, and school purposes. The value of the property in excess of this exemption remains taxable. This exemption is extended to the unremarried surviving spouse or minor children. (O.C.G.A. 48-5-48)
- Homestead Exemption for Unremarried Surviving Spouse
The surviving spouse of a member of the armed forces who was killed in any war or armed conflict will be granted a homestead exemption from all ad valorem taxes for state, county, municipal and school purposes in the amount of $50,000. The surviving spouse will continue to be eligible for the exemption as long as they do not remarry. (O.C.G.A. 48-5-52.1)
In addition to the various homestead exemptions that are authorized, the law provides a property tax deferral program whereby qualified homestead property owners age 62 and older with a gross income of $15,000 or less may defer but not exempt the payment of ad valorem taxes on part or all of the homestead property. Generally, the tax would be deferred until the property ownership changes or until such time that the deferred taxes plus interest reach a level equal to 85% of the fair market value of the property.
With respect to all of the homestead exemptions, the board of tax assessors makes the final determination as to eligibility. If the homestead application is denied, the taxpayer must be notified and an appeal procedure then is available to the taxpayer.
SPECIALIZED AND PREFERENTIAL ASSESSMENT PROGRAMS
There are three types of specialized assessment programs available. Each of these specialized or preferential programs requires the property owner to covenant with the board of tax assessors to maintain the property in its qualified use for at least 10 years in order to qualify for the preference. The Board of Tax Assessors can explain the ownership and use restrictions regarding property qualifying for either of these programs. Substantial penalties result if the covenant is broken.
1. CONSERVATION USE (CUVA)
Conservation Use was approved by an overwhelming majority of Georgia voters in an effort to encourage agricultural landowners to keep their land in production in exchange for favorable tax treatment. This favorable tax treatment is designed to protect these property owners from being pressured by the property tax burden to convert their land from agricultural use to residential or commercial use. In return for the favorable tax treatment, the property owner must keep the land undeveloped in a qualifying agricultural use for a period of ten years or incur stiff penalties.
Applications for current use assessment must be filed with the county board of tax assessors on or before the last day for filing ad valorem tax returns in the county (April 1). A $12.00 recording fee must accompany all applications.
Partial list of qualifications:
- Owner must be an individual or family farm corporation, estate, trust or non-profit organization.
- Owner agrees to maintain the property in a qualifying use of ”good faith” production of agricultural products or timber for 10 years.
- Owner cannot have over 2,000 acres statewide in the Conservation Use Program. The Tax Assessors Office may request additional information regarding the use of the property if the office feels it is necessary to determine if the property qualifies for the exemption. Information that may be requested is Schedule F (Profit or Loss from Farm Income), Form 4562 Depreciation, or Crop Production Records the owner maintains (mandatory on tracts less than 10 acres).
2. PREFERENTIAL USE
Preferential Assessment is similar agricultural program to CUVA with all the same qualifying standards and limitations. The difference is CUVA vales are based on soil productivity levels and Preferential Assessment is based on fair market value taxed at 30% instead of the normal 40%
3. FOREST LAND PROTECTION ACT (FLPA)
Forest Land Conservation Use Property means forest land each tract of which consists of more than 200 acres of tangible real property of an owner subject to certain qualifications.
Such property has as its primary use the good faith subsistence or commercial production of trees, timber, or other wood and wood fiber products from or on the land. Such property may, in addition, have one or more secondary uses.
Forest land conservation use property may include, but not be limited to, land that has been certified as environmentally sensitive property by the Department of Natural Resources or which is managed in accordance with a recognized sustainable forestry certification program such as the Sustainable Forestry Initiative, Forest Stewardship Council, American Tree Farm Program, or an equivalent sustainable forestry certification program approved by the Georgia Forestry Commission.
No property shall qualify for conservation use assessment under this Code section unless and until the qualified owner of such property agrees by covenant with the appropriate taxing authority to maintain the eligible property in forest land conservation use for a period of 15 years beginning on the first day of January of the year in which such property qualifies for such conservation use assessment and ending on the last day of December of the final year of the covenant period. Each of these specialized or preferential programs requires the property owner to covenant with the board of tax assessors to maintain the property in its qualified use for at least 10 years in order to qualify for the preference. The Board of Tax Assessors can explain the ownership and use restrictions regarding property qualifying for either of these programs. Substantial penalties result if the covenant is broken.
The governing authority of any county or municipality may, subject to the approval of the electors of such political subdivision, except from ad valorem taxation, including all such taxes levied for educational purposes and for State purposes, all or any of the following types of tangible property. Application for this exemption must be made each year by April 1 in order to receive the maximum exemption on qualifying Inventory.
- Inventory of goods in the process of manufacture or production, which shall include all partly finished goods and raw materials, held for direct use or consumption in the ordinary course of the taxpayer’s manufacturing or production business in the State of Georgia.
- Inventory of finished goods manufactured or produced within the State of Georgia in the ordinary course of the taxpayer’s manufacturing or production business when held by the original manufacturer or producer of such finished goods. The exemption provided for herein shall be for a period not exceeding twelve (12) months from the date such property is produced or manufactured.
- Inventory of finished goods which, on the first day of January, are stored in a warehouse, dock, or wharf, whether public or private, and which are destined for shipment to a final destination outside the State of Georgia and inventory of finished goods which are shipped into the State of Georgia from outside the State and stored for transshipment to a final destination outside this State. The exemption provided for herein shall be for a period not exceeding twelve (12) months from the date such property is stored in this State.
For further details on Freeport exemption, read O.C.G.A. 48-5-48.2 in its entirety or contact the tax assessor’s office.