Millage rates. Real and personal property. Taxes and rollback rates.

All that terminology can be complicated and learning the how and whys of property tax can be overwhelming.

School systems, cities and counties are all funded, in part, by property taxes as well as other revenue, including fines, permits, licenses, sales tax, transfers from other governmental agencies, interest and grants. The revenue streams make it possible for entities to provide services such as schools, fire services, ambulances and law enforcement, or fund quality-of-life features of a community such as instructional materials, libraries, community centers, road and building maintenance and parks.

In addition to real estate, property tax is paid on real and personal property, motor vehicles, mobile homes, timber and heavy equipment. There is a different way to compute property taxes on motor vehicles, however the amount is included in the total assessed property taxes.

Property taxes, known as ad valorem, Latin for “add value,” taxes, are the revenue collected based on the value of real estate, personal property, heavy equipment, mobile homes, timber and motor vehicles. This forms the total, or gross tax digest.

Taxes are based on the assessed, not fair market value, of real or personal property.

To assess a property, said Marcus Jordan, Newton County Tax Assessor, “We deal with actual property values. Property is assessed every year. Market sales are tracked for a year to get property value amounts.

“We have appraisers on staff,” he said. “Any time there’s a transfer of property, we get those numbers. Any time something new is built, we get those numbers as well.”

Real property is considered permanent and immovable in nature, like land and the buildings sitting on land. Personal property includes airplanes, boats and business equipment and inventory. Additional property taxes are levied against motor vehicles, mobile homes and heavy duty equipment. A timber tax is paid at the time of harvest.

The tax digest records the total amount of assessed property values in a district, county or city. Adjustments are made to this “gross” digest, including exemptions for homesteads and religious or nonprofit organization property and an additional exemption for land under the Forest Land Protection Act (FLPA).

It is that adjusted net digest that cities, counties and school districts use to determine the millage rate for the coming year. When property values go up and the previous year’s millage rate is used to commutate taxes, it is considered a tax increase. Three public hearings must be held before this millage rate can be adopted.

To maintain the same tax income as received the previous year, the millage rate must be rolled back. Because the actual taxes on the property, even if it’s worth more than the previous year, have not increased there is no need for a public hearing.

Assessed valuation is 40 percent of the fair market value of a property in Georgia. A home that is sold for $250,000 would be assessed as being $100,000 for property tax calculation purposes.

The $100,000 is multiplied times the millage rate. Millage rate is one dollar of taxes for $1,000 of property value, and for property in Newton County, that means annual taxes would be $1,299 on a $250,000 fair market priced house.
For those whose houses have been homesteaded, the assessed property values are adjusted down.

According to Jordan, a homestead is allowed only on someone’s primary resident and must be filed with the county tax commissioner or board of tax assessors. The form is available at https://dor.georgia.gov/documents/application-homestead-exemption.

“On average, the typical homestead for residents under the age of 62 [is] probably saving $250 to $300 a year,” Jordan said. Home owners between the ages of 62 and 65 could save in the area of $400, and for 65 and older, the savings could go as high as $600.

There are also homestead savings for disabled veterans, he said. Savings all “depends on value of home. For some of them it could be minimal, for others it can be significant.”

Setting the millage rate

Cities, counties and school districts set the millage rate. Jordan said the millage rate could go up or down, depending on the decision of boards or councils. The assessor’s office only deals with property values.

“Most people when they look at the millage rate, they assume their property taxes are going up,” Jordan said. “Back when we had a decline in values, the commissioners left the millage rate stayed the same, the revenue was less.”
However, he said, property values are increasing slightly in many areas of the county. “The way the market is,” he said, “we may have an area where things increase [in value] 16 or 17 percent; another area where the increase is only 3 percent; and another area where it may go down.”

Computing the taxes

It’s not the assessor’s office that computes the taxes. That’s done by the tax commissioner of the county.
Barbara Dingler has been Newton County’s Tax Commissioner for 16 years.

“When you have growth, you have new monies,” she said. That means when the Newton County Board of Commissioners votes to keep the 2015 millage rate of 12.99 for 2016, “that’s considered getting new money.”
The Newton County School System (NCSS) Board of Education recently approved maintaining 2015’s millage rate at 20 mills, which is the highest rate the state allows. “They have been at a 20 mill rate for [five] years,” Dingler said. “They have an intent to increase the actual tax rates.”

In addition to holding public hearings, seven days before the hearings, NCSS, Newton County, Covington and Porterdale are required to publish in the local newspaper, in this case The Covington News, a five year history of the property tax digest, Dingler said. They also have to publish dates of the hearings and the budget.

This year, few people attended public hearings. According to Leigh Anne Knight, City Manager for Covington, no one attended the public hearings on the millage rate acceptance and tax increase. Only five or six people showed up for the three different public hearings held by the county, and most of them suggested raising the millage rate a half of percent to cover the cost of the convenience center.

After the hearings were closed the entities voted to establish the year’s millage rate. Because some of Newton County has been incorporated into municipalities that provide fire and ambulance service, there are three millage rates set by the county: one at 12.99 mills for all property in the county; one at .842 mills for unincorporated areas of the county served by the county’s fire department; and one at .451 for areas served by the county’s ambulances.

The NCSS millage rate is 20 mils per $1,000 of assessed property value. In Covington the rate is 7.65 mils and in Porterdale, it’s 17.60.

Once the digest and millage rates are set, Dingler has to take everything to the state Department of Revenue. It must be approved by the state before the taxes can be collected.

Most people get their assessments after the books are closed April 1. Property owners will receive notices in the mail listing the appraised value of the property and the estimated taxes.

Those disagreeing with the amount can appeal. However, Dingler said, “You can’t appeal the taxes. You can appeal the assessed value [of property].”

Once the notice is received, property owners have 45 days to appeal the assessment. “If they don’t,” she said, “they accept the assessment.”

Newton County raised its millage a year ago, and the school system opted not to adopt a roll back, making 2016, a repeat that county-wide taxes have increased.