Assessment Appeal Law

Georgia Property Tax Assessment Appeals

Find a Real Property Tax Attorney

Let the market do the work in setting property-tax values

6:01 pm July 15, 2011, by Kyle Wingfield

The other day I went to the store and bought something for $20. When the cashier rung it up, he said, “Sorry, but the state of Georgia thinks this is worth $25 — so you have to pay sales tax on that total.”

When I got back to the office, I logged on to view my paycheck and saw it was lower than usual. “Sorry,” I was told, “but the government decided you ought to be paying income tax on 20 percent more than we really pay you.”

Of course, neither of these absurdities really happened. So why do county governments routinely tax real estate at an amount other than its price?

As it happens, I actually did spend part of my recent vacation at a hearing for my property tax appeal. (Hey, fun for the whole family!) Two years after my wife and I bought our house, and 13 months after we appealed the county’s new valuation of it, I sat in a room with two county appraisers and three Board of Equalization members to discuss whether the property was, as the county said, worth 47 percent more than we paid for it.

That’s six people: three of them chosen by the grand jury and trained for 40 hours, two of them on the county payroll, and me, taking time off work to be present.

The county appraisers offered some sale prices of comparable homes in our neighborhood to prove our house was worth the higher figure. I offered sale prices of some other comparable houses to prove it wasn’t. The board took a quick vote — I won — and that was that.

At the end, the board members asked me if I had any questions. The more I think about it, I do have one: Isn’t there a better way to determine how much properties are worth?

There is. It’s called the market, and it’s already made these calculations for us.

If a couple buy a house for $200,000, they can hardly argue to the county that it really isn’t worth that much for tax purposes. So how can the county credibly claim it’s worth more than $200,000 for tax purposes?

Yet counties do just that, all the time.

The irony of having county appraisers determine separate values is that one of their chief tools — those comparable sale prices — happens to be what buyers and sellers use to settle on a price, too. Fulton County alone is spending $8.6 million this year to determine the value of real estate.

Then there’s the fact the county gets to decide both the tax rate and the value to which that rate is applied. My examples about sales and income taxes were absurd precisely because of such total, government-set subjectivity.

On the one hand, the county’s elected officials don’t have to take the heat for raising millage rates quite so much — because, with its other hand, the county is artificially manipulating home values already set in a free market. Which is probably why they’re unlikely to change the system.

And it’s one reason, I suspect, that many Georgians hate the property tax like no other.

My idea? When a property is sold, its price is the county’s valuation. Let experts set a steady percentage rate by which the home’s value rises each year until it’s sold again and the value resets.

Are there situations that seem to demand a different procedure, such as distressed sales or new construction? Sure — but better to have a separate system to deal with those homes and an objective, transparent and less costly one for everyone else.