Decatur school board approves new senior homestead school tax exemption

James Herndon is the Decatur school board representative on the nine-person Senior Homestead Exemption Commission, which has crafted a new exemption of school taxes for seniors 65-69 and 70 and over. The new exemption still has to pass several more steps before taking effect in Jan. 2022. Courtesy of James Herndon

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James Herndon is the Decatur school board representative on the nine-person Senior Homestead Exemption Commission, which has crafted a new exemption of school taxes for seniors 65-69 and 70 and over. The new exemption still has to pass several more steps before taking effect in Jan. 2022. Courtesy of James Herndon

Decatur’s school board recently approved a new senior homestead school tax exemption that will save some residents $4,050 in annual school taxes, while a select group of seniors won’t pay any school taxes.

The new exemption still has to endure several more steps—it must pass through the 2021 General Assembly and get approved by voters in Nov. 2021-- before taking effect Jan. 1, 2022.

It would replace the current exemption, active since Jan. 2017, that offers seniors 65 and over full exemption of all school taxes. But each year since taking effect that exemption has cost City Schools of Decatur considerably more than originally anticipated. Last spring when the school board created the nine-person Senior Homestead Exemption Commission to craft a new exemption, the board’s primary mandate was that CSD not lose more than $4.3 million annually.

The commission came up with a split exemption, one for residents 65-69 and another for those 70 and over. After completion of a recent study by the Georgia State University’s Andrew Young School Center for State & Local Finance, the commission determined CSD could afford a $200,000 exemption and remain within that $4.3 million cap.

Here’s how the exemption breaks down

*Those in the 65-69 bracket get the $200,000 exemption if they meet an income requirement of making 80 percent (or less) of metro Atlanta’s annual median income for a two-person household, currently $52,960. At 70 and over the income requirement is deleted and everyone gets the $200,000 exemption.

*Given City Schools of Decatur’s current millage rate of 20.25, a $200,000 exemption is worth $4,050 in school taxes you don’t pay. For example, if you own a $500,000 home you are taxed at 50 percent or $250,000, meaning that with the exemption you are taxed on only the remaining $50,000, so you pay $4,050 less in taxes.

If you own a condo valued at $250,000 you are taxed for $125,000 which, since it’s below $200,000 you pay no school taxes. The bottom line is, for every senior 65-69 who meets the income requirement, or every senior 70 and over and regardless of income, you pay no taxes or $4,050 less.

There are three other school-related exemptions that have been on the city books long before 2017. Each remains active, even if this new exemption gets passed. The most notable is the S-2 exemption, passed in 1995, where those 80 and over are exempt from all school taxes if their federal adjusted gross income doesn’t exceed $40,000.