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It's Tax Appeals Time - Know Before You Owe

Back To ArticlesMathew M. McCoy
May 2, 2012

 

IT’S TAX APPEAL TIME – KNOW BEFORE YOU OWE
If you own real estate in Chatham County, then now is this time to evaluate your tax assessed fair market value and determine whether an appeal is appropriate. For the past three years, the legislature has blessed all Georgia residents with a “three year freeze” on their tax assessed real property values. The only changes that could have affected the “frozen” fair market values were new construction, permit activities, and land additions.  The freeze expired this year and the Chatham County Board of Tax Assessors is free to increase your assessment. Such increases are expected.
Sometime between May 1st and July 1st of this year the Chatham County Board of Tax Assessors will deliver Notices of Assessment (NOA) to every real property owner in Chatham County. Property owners have 45 days from the date the NOA is issued to file an appeal. Arguments that the 45 day time period should be extended because the NOA was misplaced are not well received by the Chatham County Board of Tax Assessors. As such, if you have not received a NOA by June 1st of this year, then you should contact the Chatham County Board of Tax Assessors and request an additional copy.
Provided you have received a NOA, then there are several simple steps you can follow to determine whether you should appeal:
Step one: Determine whether your opinion of fair market value differs from the Chatham County Board of Tax Assessors’ opinion and calculate the difference. Upon receipt of the NOA, highlight the column entitled current year 100% fair market value. If your opinion of value is less than Chatham County’s value, then subtract your opinion from the Chatham County value to calculate the difference or amount in dispute. For example, if you own an unimproved lot in the City of Savannah and you believe the fair market value is $200,000, but the Chatham County Board of Assessors has established the fair market value at $300,000, then the “disputed fair market value” is $100,000.
Step two: Calculate the disputed tax assessed value. Ad valorem property taxes are assessed at 40% of the fair market value. As such, in order to calculate the disputed tax value, you simply multiply the “disputed fair market value” by 0.40. Using our example, 40% of $100,000 or $40,000 is the “disputed tax assessed value”
Step three: Estimate the tax benefit. While millage rates for 2012 are not determined until later in the year, you can estimate the tax benefit of your opinion by using the 2011 millage. Using our example (property located in the City of Savannah), the combined millage rate for 2011 was $38,738 per $1,000. Therefore, in order to calculate the tax benefit, the disputed tax assessed value of $40,000 is multiplied by the millage 0.038738 to arrive at the potential one year tax benefit of $1,549.52. Under Georgia law, the value established on appeal would be frozen for the year in question (2012) plus two additional years 2013 and 2014. Therefore, you would receive the tax benefit for three years or a total tax benefit of $4,648.54.
As illustrated by our example, what may at first glance appear to be a very large dispute over $100,000.00 of fair market value is actually a dispute over $1,549.52 of tax liability for tax year 2012 with a maximum potential benefit of $4,648.54. The question of how much time, effort, and/or money you wish to spend prosecuting a tax appeal should turn on your level of confidence in your position and the potential benefit to be gained.
For more information on the tax appeal process, consult with an experienced attorney, log onto the Chatham CountyTax Assessors Website, boa.chathamcounty.org or email The Chatham County Board of Assessors at boa@chathamcounty.org.
Mathew M. McCoy is a partner at the law firm of McCorkle & Johnson, LLP. He can be reached at 912-232-6485 or mmm@mccorklejohnson.com.
 
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