Georgia's new plan could help homeowners keep property taxes down

ATLANTA, Georgia: To help Georgians unhappy with their rising property bills, lawmakers have devised a plan to limit the tax on a home's increasing value.

The proposed plan aims to shield current homeowners from rising property tax bills. Still, critics argue that the caps will unfairly transfer the tax burden to new homeowners, renters, and other property owners.

As early voting begins, residents are considering a state constitutional amendment that would limit annual increases in a home's taxable value to the broader inflation rate.

Georgia is one of eight states where voters decide on property tax-related measures this November 5, reflecting how escalating tax bills shape national politics.

The most significant vote is in North Dakota, where a referendum proposes eliminating property taxes, except for repaying existing debts. Florida, Arizona, Colorado, Illinois, New Mexico, and Wyoming also address similar tax issues at the polls.

With demand outweighing supply, housing prices are rising nationwide, and those increased values can show up in higher taxes.

According to the Georgia Department of Revenue figures, the total assessed value of property across Georgia rose nearly 39 percent from 2018 to 2022. Most governments pocketed increased revenues without raising tax rates, boosting employee pay and other spending. Statewide property tax collections rose 41 percent from 2018 to 2022.

Constituents gave lawmakers an earful, and they responded with the proposed constitutional amendment. State Senate Finance Committee Chairman Chuck Hufstetler, a Rome Republican who helped write it, calls increases based on higher valuations "a backdoor tax increase."

Dozens of Georgia counties, cities, and school systems already operate under similar local assessment caps.

Andrey Yushkov, a senior policy analyst at the Tax Foundation, cautioned that the measure could make homeownership more challenging. New buyers would face higher property tax bills, while longtime homeowners would be incentivized to stay put to maintain lower taxes.

California, which introduced a stricter cap with Proposition 13 in 1978, has experienced similar issues.

Yushkov also pointed out that the amendment doesn't protect apartments and commercial properties from higher assessments, meaning those increased tax costs would likely be passed on to renters.

The measure also includes a provision letting city and county governments increase sales taxes by a penny on every US$1 of sales to replace property taxes.