As a Georgia landowner, understanding how Georgia property taxes work is crucial for budgeting and making informed decisions about your land. In this comprehensive guide, we'll walk you through everything you need to know about Georgia land taxes, and capital gains tax on real estate in Georgia, from how they're calculated to strategies for minimizing your tax liability.
Key Takeaways
- Georgia land taxes are based on 40% of the fair market value of the property, as determined by the county tax assessor.
- Millage rates, set by each taxing authority, determine the tax owed per $1,000 of assessed value and can vary widely across the state.
- Landowners can appeal their property's assessed value if they believe it is inaccurate, potentially lowering their tax bill.
- Selling land in Georgia triggers various taxes, including capital gains tax, transfer tax, and withholding tax for non-resident sellers.
- Homestead exemptions, assessment appeals, and special programs like conservation use assessment can help landowners reduce their property tax liability.
Understanding Georgia Land Taxes
Georgia landowners are subject to annual property taxes based on the assessed value of their land. While land taxes can be a significant expense, understanding how they work is the first step to minimizing your tax liability.
What are land taxes in Georgia?
In Georgia, land taxes are ad valorem taxes, meaning they are based on the property's value. Each county assesses and collects property taxes annually to fund local services like schools, roads, and public safety. Land taxes apply to all types of real property, including vacant land, agricultural land, and timberland.
Who has to pay land taxes in Georgia?
All landowners in Georgia are required to pay annual property taxes on their land holdings. This includes individuals, businesses, trusts, and other legal entities. Even if you don't live in Georgia, you're still responsible for paying taxes on any land you own.
Factors that determine land tax rates
Several key factors influence how much you'll owe in Georgia land taxes each year:
- Assessed value: Your land's assessed value is 40% of its fair Georgia land market value as determined by the county tax assessor. Fair market value is based on recent sales of similar properties in your area, and the trend in the Georgia land market.
- Millage rates: Each county and municipality sets its tax per $1,000 assessed value. Millage rates can vary widely across the state. For example, in 2021, Fulton County had a millage rate of 33.45, while Ware County's rate was just 16.94.
- Exemptions: Georgia offers several property tax exemptions that can lower your land's taxable value, such as the Conservation Use Value Assessment (CUVA) program for agricultural and timberland.
By familiarizing yourself with how these factors apply to your property, you'll be better equipped to estimate your annual land tax liability, and have the required paperwork to sell Georgia land. In the next section, we'll walk through the steps to calculate your Georgia land taxes.
Calculating and Paying Your Georgia Land Tax Bill
To determine how much you'll owe in annual land taxes, you must first know your property's assessed value and the applicable millage rates in your area. Here's a step-by-step guide on calculating your bill and making payments.
How to look up your land's assessed value
Your land's assessed value is 40% of its fair market value, as determined by the county board of tax assessors. To find your assessed value:
- Visit your county tax assessor's website and search for your property using the address or parcel ID number
- Check your annual Notice of Assessment mailed to you each spring
- Contact your county tax assessor's office for assistance
If you disagree with the assessed value, you have 45 days from the assessment notice date to file an appeal with the county board of equalization.
Millage rates and how they impact your tax bill
As stated earlier, mortgage rates determine the tax owed per $1,000 assessed value. One mill equals $1 in taxes per $1,000 in value. If your land's assessed value is $50,000 and the combined millage rate from all taxing authorities is 30 mills, your annual property tax would be $1,500.
Millage rates vary widely across Georgia, as each county, city, and school district sets its own rates. The average millage rate in Georgia is around 30 mills. Contact your county tax commissioner's office or visit their website to find your area's most current millage rates.
Examples of Georgia land tax calculations
Here are a couple examples of how to calculate annual Georgia land taxes:
Example 1:
- The fair market value of land: $100,000
- Assessed value (40% of fair market value): $40,000
- Combined millage rate: 25 mills
- Annual property tax = $40,000 x (25 / 1000) = $1,000
Example 2:
- Fair market value of land: $75,000
- Assessed value (40% of fair market value): $30,000
- Combined millage rate: 32.5 mills
- Annual property tax = $30,000 x (32.5 / 1000) = $975
When are land taxes due in Georgia?
Georgia property taxes are due annually on December 20th. Many counties mail bills in August or September, but you're still responsible for paying on time even if you don't receive a bill.
Some counties allow you to pay in two installments, with the first half due September 15th and the second half due November 15th. Check with your county tax commissioner to see if installment payments are an option where you live.
Payment methods for Georgia land taxes
You can pay your Georgia land taxes in a variety of ways:
- Online by credit card, debit card, or e-check on your county tax commissioner's website
- By mail with a personal check, cashier's check, or money order
- In person at the county tax commissioner's office with cash, check, money order, credit card or debit card
- By phone using a credit or debit card
- Through your mortgage escrow account, if your lender offers this service
By familiarizing yourself with calculating and paying your Georgia land taxes, you'll be better equipped to budget for this annual expense and avoid costly delinquent fees.
Tax Implications of Selling Land in Georgia
When you sell vacant land in Georgia, there are several tax considerations to remember. Understanding your potential tax liability can help you plan ahead and make informed decisions about pricing, timing, and structuring your land sale.
Is land sold taxed in Georgia?
Yes, the sale of land in Georgia is subject to various state and federal taxes. The most common taxes that apply to land sales are:
- Capital gains tax on any profit from the sale, including sales from inherited Georgia land.
- State real estate transfer tax on the deed
- Withholding tax for certain sellers
The exact taxes owed will depend on factors like how long you owned the land, your basis in the property, and your individual tax situation.
Capital gains tax on land sales
The profit you make when selling land is subject to capital gains tax at both the federal and state level. Capital gain is calculated as the difference between your sale price and your basis in the property (usually your original purchase price plus any improvements).
If you owned the land for over a year, your profit will be taxed at the long-term capital gains rate. As of 2021, federal long-term capital gains rates are 0%, 15%, or 20%, depending on your taxable income. Georgia's long-term capital gains rate is a flat 5.75%.
For example, let's say you purchased vacant land 5 years ago for $50,000 and sold it this year for $100,000. Your capital gain would be $50,000. Assuming you fall into the 15% federal bracket, your total capital gains tax would be:
- Federal: $50,000 x 15% = $7,500
- State: $50,000 x 5.75% = $2,875
- Total capital gains tax: $10,375
If you owned the land for one year or less, your profit will be taxed as a short-term capital gain at your ordinary income tax rates.
Reporting land sale income on your tax return
You must report the sale of vacant land on your federal and state income tax returns for the year of sale. To calculate your capital gain, you'll need to know:
- Your basis in the property (purchase price plus improvements)
- Your net proceeds from the sale (sale price minus closing costs)
Use Schedule D and Form 8949 to report the sale on your federal return. Use Form 500 Schedule D to report and pay state capital gains tax for Georgia.
If you sold land at a loss, you can deduct the loss on your tax return to offset other capital gains or ordinary income (up to $3,000 per year). Be sure to consult a tax professional for guidance on reporting a loss.
Real estate transfer tax on land sales
In addition to capital gains tax, Georgia levies a real estate transfer tax on land sales. The transfer tax is $1 per $1,000 of value, based on the property's sale price or fair market value.
For example, if you sold vacant land for $100,000, the transfer tax would be:
$100,000 / $1,000 = $100
The seller is typically responsible for paying the transfer tax, although the buyer may agree to pay as part of the sale negotiation. Some counties also charge an additional local transfer tax on top of the state tax.
Certain types of deeds are exempt from the transfer tax, such as:
- Deeds of gift
- Deeds of foreclosure
- Deeds to or from government entities
Check with your closing attorney or tax advisor to determine if any exemptions apply to your land sale.
By understanding the tax implications of selling land in Georgia, you can plan ahead to minimize your liability and avoid surprises at closing. Always consult a qualified tax professional for personalized advice based on your situation.
Strategies to Minimize Georgia Land Tax Liability
As a landowner, you have several options to reduce your annual Georgia property taxes. You can significantly lower your land tax liability by taking advantage of available exemptions, appealing your assessment, or enrolling in conservation use programs. Let's review three key strategies to explore.
Applying for homestead exemptions
If you own and occupy a home on your land as your primary residence, you may be eligible for a homestead exemption. Georgia offers several types of homestead exemptions that can reduce your taxable value:
- Basic Homestead Exemption: This provides a $2,000 exemption from county and school taxes. It is available to all homeowners regardless of age or income.
- Individuals 65 or Older May claim a $4,000 exemption from county taxes if their income does not exceed $10,000 (excluding certain retirement income). Some counties also offer additional exemptions for seniors from school taxes.
- Disabled Veterans or Surviving Spouses May qualify for exemptions of $60,000 or more depending on their disability rating or circumstances.
Contact your county tax commissioner's office to apply for a homestead exemption. Applications are typically due by April 1st. Once granted, the exemption automatically renews yearly as long as you remain eligible.
Appealing your land's assessed value
You can appeal if you believe your land has been assessed above its fair market value. The appeal process starts with filing a written appeal with your county board of tax assessors within 45 days of receiving your annual assessment notice.
To support your appeal, gather evidence such as:
- A recent appraisal of your land
- Sales data for similar properties in your area
- Photographs highlighting issues that negatively impact your land's value
- Discrepancies in your land's acreage or other key characteristics
Your appeal will go before the county board of equalization for a hearing. If you are still dissatisfied with the outcome, you may appeal further to an arbitrator or superior court. A successful appeal can lower your taxable value and provide savings for several years.
Enrolling eligible land in the conservation use program
You may qualify for Georgia's Conservation Use Value Assessment (CUVA) program if you own agricultural land, timberland, or environmentally sensitive land. CUVA provides significant property tax savings for landowners who agree to keep their land undeveloped for 10 years.
Check out our complete guide to Georgia's Conservation Use Value Assessment (CUVA) program for more information.
By utilizing homestead exemptions, filing assessment appeals, and enrolling eligible land for conservation use, Georgia landowners have several powerful tools to minimize their property tax liability. Consult with local tax officials or a knowledgeable attorney to determine the best strategies for your unique land and circumstances.
Georgia land taxes can be complex, with numerous factors influencing how much landowners owe yearly. By familiarizing yourself with the assessment process, millage rates, and available exemptions and special programs, you'll be better equipped to estimate your annual tax liability and identify opportunities for savings.
Frequently Asked Questions About Georgia Land Taxes
Do you pay intangibles tax on vacant land in Georgia?
No, the intangible tax does not apply to vacant land in Georgia. Intangible tax is levied on the fair market value of intangible personal property like stocks, bonds, and accounts receivable, but not on real property such as land.
How do you figure out land taxes in Georgia?
To determine your land taxes in Georgia, multiply your land's assessed value (40% of fair market value) by the millage rate for your county and city. Your county tax commissioner's office can provide the current millage rates and walk you through the calculation.
What taxes will I owe on land sold in Georgia?
When you sell land in Georgia, you will owe capital gains tax on any profit from the sale at the federal and state level. You may also owe state real estate transfer tax of $1 per $1,000 of value and withholding tax if you are a non-resident seller.
Is tax plat binding on land ownership in Georgia?
No, a tax plat or tax map is not legally binding for determining property ownership boundaries in Georgia. While tax maps are helpful for general reference and location purposes, they do not replace a legal survey and deed description for establishing official property lines.
What is tax-forfeited land in Georgia?
Tax-forfeited land is a property that has been seized by the county for unpaid property taxes. If the taxes remain unpaid, the county may sell the land at a tax sale to recover the delinquent taxes, penalties, and interest owed. Buyers at tax sales do not receive full title to the property until the right of redemption period expires.
