What Is the Georgia Homestead Exemption?

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There are two kinds of homestead exemption in Georgia. One is the exemption that lowers a homeowner's property tax bill. The other protects creditors from taking the home in bankruptcy.

Property Tax Exemption

You can request a homestead exemption for a year's property taxes if you owned the home on Jan. 1 and you claim it as your legal residence. If you move in mid-year, you can file for the exemption but it won't take effect until after the start of the following year.

File your application with your county's tax commissioner or tax assessor, depending on local policy. Submit the application by April 1 or you'll lose the exemption until the following year.

Exemption Amounts

Nearly every home in Georgia is taxed on 40 percent of the fair market value. For example, a $100,000 home would have a taxable value of $40,000. The standard homestead exemption subtracts $2,000 from this amount, so on a $100,000 house, that reduces the taxable value to $38,000. This figure is multiplied by the property tax rate to arrive at the tax bill.

The standard exemption is available to any homeowner who meets the ownership and residency requirements. It applies to state, county, and school district taxes, with some exceptions, such as taxes used to retire bond debt. Other homestead exemptions are available as well.

  • A homeowner age 65 years or older can claim a complete exemption from state property taxes on his home and up to 10 acres of land. 
  • A disabled veteran gets up to a $60,000 exemption applying to all property taxes, plus an added amount set by the federal government.
  • The spouse of a police officer or firefighter who died in the line of duty gets a complete exemption as long as she doesn't remarry. 

Contact the county tax assessor about whether you can apply for more than one exemption. Cobb County allows you to apply for all exemptions you think you might qualify for, while Chatham County says that you can only apply for one, although you can choose whichever offers you the best tax break

Read More: What Is the Wild Card Exemption When Filing Chapter 7 Bankruptcy?

Freeze the Value

More than 20 counties in Georgia offer another type of exemption. The taxable value of the property remains the same as long as you live in the house, even if the property value goes up. This can apply to city, county or school taxes, subject to whatever qualifications each county chooses to set.

The Bankruptcy Homestead Exemption

A homestead exemption can be vitally important, too, if a homeowner has to file bankruptcy, but the bankruptcy homestead exemption is different from the tax exemption. It's governed by different laws.

Georgia law allows you to exempt up to $21,500 in home equity from forced sale or liquidation if you file Chapter 7 bankruptcy, or $43,000 if you and your spouse file bankruptcy together. Equity is the value of your home that exceeds the mortgage. These amounts cannot be turned over to your creditors.

The court can sell your house and other assets to pay your creditors when you file for Chapter 7 protection. The home sale would pay off your mortgage first, with any remaining funds going to your other creditors. If you have a $90,000 mortgage and $15,000 in home equity, the equity is less than the exemption amount so your creditors would get nothing. There's no point to selling the house, so the court will let you keep it.

Chapter 13 bankruptcy is different. You pay off your creditors over several years before the court discharges your remaining debts. The court won't sell your house, but exemptions still matter because your Chapter 13 payment plan must give creditors at least as much as they'd receive if you had filed Chapter 7 instead. The homestead exemption reduces the payoff in Chapter 7, so it makes it easier to qualify for Chapter 13.

Tips

  • Exemption values can change if the government changes its policies. Check out the local tax authority's website for current information. The Georgia Department of Revenue also has an online county-by-county guide to property taxes.