Here’s How to Appeal A Property Tax Assessment in Metro Atlanta

Summer is finally here, and for the first time in more than two years, economic indicators suggest that the housing industry has finally bottomed out both locally and nationally. But with this bit of good news comes a bad news, which is that the metro Atlanta area continues to be saddled with a high number of vacant homes, many of them foreclosures on pace to surpass 2008 record year of foreclosures.
 
In April 2009, Gov. Sonny Perdue signed SB55 into law, requiring county tax assessors to incorporate the value of foreclosed homes into property assessments. The legislation will likely provide some relief for properties located in zip codes with high foreclosures in the metro area. This is particularly important, as illustrated in a recent report commissioned by the Atlanta Neighborhood Development Partnership that shows how properties in neighborhoods impacted by a high number of foreclosures typically have inflated appraised home values.
 
The report further illustrates that taxes for properties appraised in metro Atlanta ’s five-county core area will have an overpayment of property taxes of an estimated $367.2 million, which includes an estimated $118 million in overpayment from owners of homes and businesses in areas with high foreclosures. Since the passage of SB55, several metro counties plagued by high foreclosures have reappraised properties, which also provided property owners an opportunity to appeal inflated assessments.
 
Requiring county tax assessors to reappraise homes shows that state officials are aware of the discrepancy between actual market value and assessed value, but the problem of getting a fair appraisal still exists, thus creating more problems for builders continuing to hold housing inventory.

To challenge an unfair property assessment, the owner first has to file a property tax return, which can be done in one of two ways:

 
1.     By paying taxes in the prior year on the property, the value that was the basis for the tax becomes the declaration of value for the current tax year (O.C.G.A. 48-5-20).

 
2.     By filing a PT-50R return of value between Jan. 1 and April 1 (or Jan. 1 and March 1 in counties that have installment billings). Depending on the county, property tax returns are filed with the county tax commissioner or with the county board of tax assessors.  Click here for more information on when and where to file a return in your county.

 
The process to challenge unfair assessments requires the property owner to appeal to the county board of equalization or to an arbitrator within 30 days (or 45 days in some counties) from the date of the change of assessment notice that is mailed to you by the board of tax assessors. You can file a Taxpayers Appeal of Real Property with your local tax assessor office. For specific steps to file an appeal, contact the board of tax assessors in the county in which the property is located. The process is not a complicated one, but appeals must be filed after receiving the property assessment, which is conducted every two years.
 
It’s difficult to determine how successful property reassessments have been for the building industry. Real estate-owned properties are regularly sold at deep discounts, thus making fair market value difficult to determine.
 
The challenges are obvious for both government tax assessors and builders but also for individual home owners. If a county reassess values at a reduction from prior assessments, they will likely increase the millage rate to recoup some of the lost tax revenue. County governments typically operate from three revenue sources: tax revenue, regulatory fees and fines. At least two of these categories, taxes and regulatory fees, have plummeted by as much as 25 and 50 percent respectively.
 
Taxes are a necessary function of government that nobody likes to see increase, especially on the back of real property that continues to decline in value. It’s important that property owners challenge unfair assessments to ensure that tax dollars are being applied usefully and correctly. Government at all levels has long been accused of inefficiency; however, in today’s economic climate, the public sector will be forced to adopt business practices similar to that of the private sector for survival. With this in mind, it’s important that property owners are keenly aware of where their tax dollars are going and for what use.
 
Note: The basic formula to figure the tax on a home using Georgia ’s standard $2,000 homestead exemption is: [(assessed value) - $2,000] x millage rate = tax due. The formula is straightforward, but again the challenge is “the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm’s length, bona fide sale.” In Georgia , a home’s assessed value generally is 40 percent of its fair market value.

Source: Over-Taxed and Under-Valued: Appealing a Property Tax Assessment by Christopher Burke