Almost two-thirds of 4.8 million Georgia voters approved a constitutional amendment that will cap any increases in the assessed value of someone’s primary residence at the annual inflation rate statewide.
When the Local Option Homestead Property Tax Exemption takes effect on Jan. 1, it will limit property tax hikes for homeowners when their residences’ fair-market value increases at a higher rate than inflation — but more so for the rich.
On its face, the ballot question appeared to offer an innocuous property tax break for homeowners. That’s how the mostly Republican authors of the legislation that created the proposal billed it — and how it was worded on the ballot. (It passed the state House unanimously and by a 42-11 vote in the Senate.)
The ballot question reads in full:
Provides for a general law state-wide homestead exemption that may differentiate among political subdivisions:
“Shall the constitution of Georgia be amended so as to authorize the General Assembly to provide by general law for a state-wide homestead exemption that serves to limit increases in the assessed value of households, but which any county, consolidated government, municipality, or local school system may opt out of upon the completion of certain procedures?”
Critics, however, cautioned that the amendment would sharply reduce revenue for local school districts, which rely heavily on property taxes for funding. What’s more, the assessment cap extends indefinitely, since it’s a constitutional amendment. That means the effects would magnify over time, so as long as home values increase at a faster rate than inflation.
Center for Civic Innovation policy and research director Kyle Kessler warned that the property-tax savings would primarily accrue to owners of expensive houses. That’s because capping the fair market assessment value of a $10 million home results in a much bigger property tax savings than capping the assessment for a $100,000 home.
Let’s say the fair-market assessment value of a home increases from $10 million to $12 million. That’s a 20% increase. But if the annual Georgia inflation rate is only 3.5%, then the assessment increase would be capped at $350,000 (3.5% of $10 million). Consequently, fully $1.65 million of the increase in the home’s value is tax exempt.
“I would not see how this would do anything but further [widen] the income and wealth gap in Atlanta and across the state,” Kessler said.
City or county governments and local school boards have until March 2025 to opt out of the homestead assessment cap.
Read Atlanta Civic Circle’s full explanation of the confusing ballot measure here.
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