Two voter-approved tax measures changed local tax bills starting January 2025, unless local governments opted out.
Georgia voters approved two key initiatives in the November 2024 election that could impact how much property tax homeowners and small business owners pay in 2025. These measures—Amendment 1 and Referendum A—introduce new homestead exemption rules and raise the exemption threshold for personal property. Let’s break down what each change means and how it might affect you.
Amendment 1: Inflation-Adjusted Cap on Property Tax Increases
The Basics
Amendment 1 was proposed by House Resolution 1022, with its details set out in House Bill 581, and amends the Georgia Constitution to create a statewide “floating” homestead exemption. The key feature? It limits annual increases in the taxable value of owner-occupied homes based on inflation.
Key Highlights:
- Caps assessed value growth to match the inflation rate.
- Applies uniformly across counties, cities, and school systems—unless local governments opt out.
- Took effect January 1, 2025.
Vote Outcome:
Approved by nearly 63% of voters (over 3 million votes in favor), reflecting strong statewide support.
Why It Matters:
Unless your local government opted out, your property taxes may no longer skyrocket just because home values rise rapidly. Instead, increases in your home’s taxable value are limited to how much inflation increases—offering more predictability and stability.
But There’s a Catch:
Local governments—counties, cities, and school districts—could opt out, but it wasn’t simple. They had to:
- Publicly advertise the change.
- Hold three public hearings.
- Finalize their decision by March 1, 2025.
Whether an area stayed in depended largely on local finances. Many counties already freeze homestead values under existing exemptions, but others—especially those struggling to fund schools or infrastructure—might resist the change due to potential revenue loss.
Alternative Revenue Option:
To balance their budgets, local governments that keep the floating exemption may ask voters to approve a local sales tax of up to 1%, in steps as small as 0.05%, known as a Floating Local Option Sales Tax (FLOST).
Referendum A: Expanded Personal Property Tax Exemption
The Basics
Referendum A raises the threshold for county property taxes on tangible personal property (excluding vehicles, trailers, and mobile homes). As of 2025, property owners aren’t taxed on personal property valued at $20,000 or less, up from the previous $7,500.
Legislative Path:
- Originated as House Bill 808.
- Passed both chambers of Georgia’s legislature with strong bipartisan support.
- Approved by voters with over 64% voting in favor.
Who Benefits:
This measure is expected to help:
- Homeowners with small amounts of taxable personal property.
- Small businesses who often get hit hardest by these taxes.
Financial Impact:
While this means real savings for individuals and entrepreneurs, it also means local governments—particularly school districts—will collect less in revenue. Estimates suggested a potential $250 million impact across Georgia.
Supporters argue the long-term benefits could outweigh short-term losses. By making Georgia more attractive to businesses, the referendum may stimulate job growth and increase broader economic activity.
Potential Countermeasures:
- Adjust millage rates (property tax rates).
- Explore alternative revenue streams.
What This Means for You
These changes aim to ease the property tax burden in a time of rising living costs. However, their effectiveness will depend heavily on local government participation and how they choose to manage revenue shortfalls.
What You Should Do:
- Check whether your county, city, and school district opted out of the new homestead exemption under Amendment 1.
- Understand how your property tax bill is affected by these changes.
- If you’re a small business owner, make sure your returns reflect the new personal property exemption, which began January 1, 2025.
Need Help Understanding Your Local Tax Changes? Equitax can help you navigate Georgia’s evolving property tax landscape. Whether you’re a homeowner, investor, or business owner, we can guide you in understanding exemptions, tax appeals, and strategies to reduce your liability.