Georgia Property Tax Appraisal Can't Be More Than the Recent Purchase Price

Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

You find an incredible deal that you can afford but then you see that the property taxes are way too high for you.  They are based on the price that it used to be worth.

The big question is just how much of a property tax reduction will you be able to get with a property tax appeal? 

In the past, it was a big unknown.  A good guess might be 15-20%.   But you would never be able to get it reduced by 50% even though you just bought it for 50% of what it currently is assessed at.  And there was never any guarantee that you would get any reduction.

But a new law was passed last year, SB 346 effective January 1, 2011,  that is a great boon for anyone who happened to get an incredible deal on a house.

Now, the first year of taxes are based on what the actual purchase price was.  So if you bought a million dollar home for $500,000, your property taxes will be based on a value of $500,000.

48-5-2.... the transaction amount of the most recent arm's length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year.

Here's a summary with all the details.

So if you bought a house this year, you paid the prorated tax based on the previous tax assessment value.  But at the beginning of next year, you'll get your tax bill notice showing what your taxes are based on now.  If it's more than what the pruchase price was, you can file an appeal and know that at least for 2012, your property taxes will be based on your purchase price.

If you get a loan that requires escrows, you need to talk with the lender about how you can get your escrows reduced to reflect your new lower property tax bill. 

Unfortunately, you need to be qualified based on what the current taxes are, not what they will be.  So this will still stop some people from qualifying for a loan on such high tax homes.

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About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.


Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at .


His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    


His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.


Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.


Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.


Tim is always looking to LinkIn with anyone who is interested in building their social network.


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Re-Blogged 2 times:

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Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Dear Tim,

I just discussed this with a Client yesterday - glad you did such a great post about it! Re-blog & suggest!

Have a happy day -

Nov 04, 2011 04:03 PM #1
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

Tim, thanks for the information and the link to the details, you are on top of it.

Nov 04, 2011 04:56 PM #2
M Lee

Tim - Thanks for posting this! I'd like some clarification on what is considered an "arm's length, bona fide sale". We purchased a foreclosure last year. It was on the market and had 6 other offers. It was not bought on the courthouse steps. Would you consider this an arm's length, bona fide sale?

Aug 22, 2012 04:21 AM #3
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

M Lee,  I'm not a lawyer but I'm pretty certain that an "arm's length, bona fide sale" just means that the buyer and seller don't have a relationship and the price isn't artificial.  If you had competing offers and yours was the highest then you would probably have a bona fide sale.  But if you bought it from your brother for $100, then your taxes aren't going to be based on the $100 sales price.  Check it out with your attorney.

Aug 22, 2012 04:51 AM #4
Melanie Lee

Thank you, Tim! I will certainly check with an attorney, but haven't had a chance to do so. The specific wording  "foreclosures"  was also removed from the law making it's interpretation even more obscure.

Aug 22, 2012 06:57 AM #5
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Tim Maitski

Truth, Excellence and a Good Deal
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