How property taxes and assessments work

By D.L. Bennett

The Atlanta Journal-Constitution

Assessments are the backbone of the property tax system.

They are set yearly by county appraisers who are charged with matching the appraised value of each property to what it would sell for in a transaction on the open market.

State law requires assessors to revalue each parcel at least every three years. However, many jurisdictions try to change values yearly to stay current with the market and keep from making significant changes after three years.

Homeowners can also force counties to revalue by filing a property tax return and then appealing the county’s value.

Properties are appraised by the county and then assessed at 40 percent of the fair market value. Tax rates are applied after any exemptions are subtracted.

The value of all properties in a jurisdiction are added together to form the tax digest. New construction, development, additions and renovations all typically add value that assessors pick up each year.

Before 2009, assessors could also count on property values for existing, unchanged parcels to inch up yearly.

Tax bills are a product of the assessment times the rate. So, a change in either can affect how much a property owner pays.

Also, each property is a piece of the tax digest. So, when values fall for some parcels, others become a bigger portion of the digest and can be forced to pay more.

Local governments set the tax rate annually, often in June.

A local government decides on how much revenue it needs from property taxes to operate. Assessors turn over the tax digest. Then the rate is set to collect the proper amount.

Values usually rise. That allows local government officials to lower the rate but still collect more. Until this year, that was the most common tax complaint by Georgia property owners — increasing taxes due to rising assessments.

Most of the loss this year was taken by counties from the residential portion of the tax digest. However, they offset it in many counties by adding in higher values from construction already in progress. So, many counties and cities saw their tax digest remain flat or rise slightly.

However, some jurisdictions saw their tax digests fall this year, including three Fulton cities. And assessors say more likely will next year as the commercial collapse hits.

When that happens, local governments can only increase the tax rate if officials want to at least collect the same amount of property taxes as the previous year.