Georgia has tried to fix several systemic property tax issues over the past decade. This has included overhauling the assessment freeze process and passing a statewide homestead exemption. However, these measures did not seem to bring the affordability desired by the people of Georgia, leading to several more bills that were proposed and revised countless times in the 2026 legislative session. Finally, on the last day of the session, Senate Bill 33 was passed. While initially intended as a large slashing of property taxes, it instead became a much more realistic bill that solidified certain caps.
With the bill finally being signed into law in May, progress can finally be made across Georgia. While recent relief was passed for homeowners, this law will provide some permanent fixes to the property tax system. While there may be more bills and overhauls in the future, the current law looks to be a step in the right direction. In this article, we will go over the new bill and how homeowners across Georgia can benefit from it.
Eclectic Origins
The bill that would eventually become Senate Bill 33 and be signed into law went through numerous revisions. Originally, the bill’s precursor intended to eliminate all homestead property taxes with an escalating homestead exemption. This was eventually found to be unrealistic, along with requiring a constitutional amendment. This transitioned to House Bill 1116, which failed to pass the Senate. At the last minute, Senate Bill 33, formerly a bill targeted at THC, was completely changed to once again be targeted at property taxes. This finally passed both houses and was eventually signed into law by the governor.
The 3% Property Tax Cap
The main meat of the law was already passed in 2024. The “Save Our Homes Act” was signed into law to create a statewide homestead exemption. At the heart of the law was a cap on homestead properties when it came to assessments, restricting them to the rate of inflation. However, there was an opt-out clause in the exemption, which nearly every county and taxing body took, making the act pointless for the vast majority of Georgians. In some cases, such as metro Atlanta, homeowners already had better homestead exemptions. However, most of the state was left holding the bag.
The new law makes the statewide floating homestead exemption mandatory begining in 2027. With the cap in place, annual increases in homestead assessments will generally be limited to inflation-based growth. The cap can go higher if local voters wish it to, giving more flexibility to communities that may want more funding for public services at the expense of higher taxes. However, unlike the previous act, local governments cannot unilaterally override the cap without voter involvement. This is intended to prevent large spikes in value that can quickly lead to higher taxes. The main downside of the cap is that it could lead to lower revenues for things like school districts.
LHOST
Starting in 2028, counties can pass a Local Homestead Option Sales Tax (LHOST), which is a 1% increase in the sales tax. Any revenue generated by this increase can then be held back by the county and eventually used to fund greater exemptions for homesteads. This functions similarly to the Floating Local Option Sales Tax (FLOST), which has been on the books for the last few years. This option can help local governments give their citizens more tax relief.
What it Means for Homeowners
In Georgia, property tax bills are calculated using two criteria. The first is assessed values, which are derived from property assessments. The second aspect is millage rates, which are tax rates that are applied to assessed values. By capping the assessments to inflation, homeowners could see lower taxes overall. Local governments and entities can still raise millage rates to make up the budget shortfall, but these face their own limits, including 20 mills for school districts. School districts make up the largest portion of taxes by far, so the new cap should bring relief from school taxes.
The Law Does Not Benefit Homes Outside of Homesteads
While the law is great news for those with homestead exemptions, it does not extend protections to residential real estate without an exemption. This means that rental properties, second homes, and investment properties will not see their assessments capped. As taxing bodies raise rates to help offset the assessment caps, these kinds of homes will see larger and larger tax bills. So, while the new law will be a boon for families with one home, it could be a bane for real estate investors.
Property Tax Appeals Can Enhance These Caps
While the caps will bring relief to homeowners with homestead exemptions, they do not lower assessments that are already high. While the caps and exemptions are vital, homeowners, businesses, and investors are also turning to property tax appeals at a record pace, especially around metro Atlanta. Appeals challenge the assessments put forward by the county assessor’s office, lowering the market value of a property. This is purely for assessment purposes and will not lower the resale value of a home or business. While caps restrain assessment growth, appeals can lower it outright, leading to even more savings. Homeowners can use the new caps, exemptions, and appeals as a strong combination to land the maximum savings.
Georgia also has the unique feature of the assessment freeze. When a property is successfully appealed, the new assessment amount is kept frozen for three years. This means that appeals protect taxpayers from rising costs better than a cap. This will even work hand-in-hand with the cap, as the assessment will only be able to grow by 3% every year after the freeze expires. However, the appeal must be successful, which requires evidence and dedication from the taxpayer.
O’Connor is Here to Help
Whether you own a homestead, several homes, or a business, O’Connor is here to give premium and personal support in your quest for reduced taxes. We offer full support for property tax appeals for both homes and businesses. While we are based in Houston, we have a branch office in Atlanta specifically to serve Georgia property owners, and combine local expertise with national resources. This includes patented databases that can find the perfect evidence for any case. When you sign up with us, we will file appeals for you and represent you at every hearing. There is no cost to join, and the only charge you will ever see is a portion of your winnings if we can lower your property taxes.
