Georgia's 159 counties depend largely on property taxes to fund their operations. Because our annual property taxes are "ad valorem" -- based on the value of your property -- the determination of that value is important. Each year, your county is required to evaluate the fair market value of your home based on recent sales data.
It's a massive job; and whenever you try to estimate values, disagreements can and will occur.
Last week, we talked about recent changes in Georgia law regarding property valuations. Here are some questions frequently asked about the process:
Q: Why should I be concerned about my property tax valuation?
A: Because values in many areas have dropped significantly in the past several years. If your valuation is higher than it should be, you are paying more than your fair share of property taxes.
Q: How can I find out what the county is using for value?
A: Many counties have websites where you can view property data, including current valuation. You are always welcome to call the tax assessor's office in the county where your property is located.
Q: How can I find out what my property is actually worth?
A: That's a very difficult question. For starters, know that your home's value on Jan. 1, 2011, is the magic number. Only sales occurring before that date may be considered in arriving at your 2011 valuation.
Next, be aware that there are simply too many parcels in most counties for county appraisers to evaluate each one annually. However, real estate values change constantly and rarely move in a straight line up or down.
Finally, recent changes to Georgia law require county officials to take nearby foreclosure sales into consideration as factors in the value of your home. This can have a dramatic impact on your valuation.
Probably the easiest way to get a good guess about your home's actual value is to ask a real estate professional. They have access to the tools and information needed to help you make a reasonable guess. At the other end of the spectrum, you can hire an experienced real estate appraiser to estimate value.
Q: But if everyone gets their valuation lowered by, say, 15 percent, won't the county simply raise its millage rate by 15 percent so the budget can remain the same? Won't my tax bill just stay the same?
A: In a perfect world, you would be right. But the reality is that there will always be some properties that are overvalued in comparison to others nearby. If fairness matters, you owe it to yourself to examine your tax valuation every year.
Next week we will look in detail at ways to estimate the true value of your home.
For a five-step plan to help you reduce your property taxes, visit money99.com.
John Adams is an author, broadcaster and investor. He answers real estate questions on radio station WGKA (920am) every Saturday at noon. For more information or to comment, visit www.money99.com.
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