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Homestead Exemption Tips

  Information Regarding Homestead Exemption
Courtesy of F. Reese Freyer, III – Property Systems of Georgia, Inc.

A regular homestead exemption from state and county taxes is available to legal residents of Georgia owning their homes. An owner is entitled to claim partial exemption from taxation on the first $2,000 - $10,000 for tax value, which can amount to substantial annual savings for the homeowner.

Who is Entitled to Homestead Exemption?
Any person having both owned and occupied the house on 1 January.

Where do I file?
For the first year, the homeowner(s) must go in person to the office of the Tax Commissioner (or an annex) of the county in which the property is located.

When do I file?
A written application must be filed between 1 January and 1 March or 1 April (depending on your county)

Documents needed in filing:
The Warranty Deed or a copy of the closing statement may be required. The Tax Commissioner will furnish forms for application.

Possible questions on the homestead application:
1. Present and previous ownership
2. Legal description of the property.
3. Kind of title held
4. Name of the mortgage company and loan balance

Receipt of tax bills:
The tax bills will be mailed as early as July and no later than December, depending on the county that your home is located. When the lender is escrowing funds monthly for the taxes, the homeowner/taxpayer should write the loan number on the tax bill and forward to the mortgage company for payment out of the escrow account.

To file Homestead Exemption takes 10 minutes depending on the line. I you have further questions, please call the Tax Commissioner’s office or me at 877-522-5577. I hope you have enjoyed your new home!

As a past client, I wanted to let you be aware of this new rule by the I.R.S. regarding discount points. Please call me if you have any questions at 877-522-5577.

Deductible points:
The IRS is now allowing homebuyers to deduct points paid at closing by seller. This is a reversal of a long-time policy by IRS. The way the IRS now views the transaction is this: The seller is treated as having paid points to the buyer, who in turn is treated as having used this cash to pay points charged by the lender. The IRS reasons that the seller has already built such points into the selling price of the home. The new rule is available to homebuyers who purchased homes after Dec. 31, 1990. This means that homebuyers who purchased their home in 1993 have already filed a tax return, or who purchased homes in 1992 and 1991, may file amended tax returns for those years on Form 1040X, they should write “seller-paid points” in the upper right-hand corner and attach a copy of their HUD-1 settlement statement. Homeowners should direct further questions to their tax advisors.

Filing homestead exemption can save a bundle
Taken from the Atlanta Journal-Constitution

Everyone knows April 15, is the deadline for filing income taxes. But do you know the deadline for filing for a homestead exemption on your property taxes?

Depending on your county, it’s March 1 or April 1 - and unlike income taxes, there are no extensions. “Georgia law doesn’t allow filing extensions on homestead exemption,” said George Wingo, Tax Commissioner in Fayette County. Miss the filing deadline for homestead exemption, and you will pay higher pay higher taxes on your home. But don’t panic. If you previously filed for the exemption in your county, your tax commissioner probably has it on record – and you won’t need to file again. For sure, however, three kinds of homeowners need to pay special attention to the filing deadline.

· Those who bought or built a new home this year, because this year is their first chance to file for the exemption
· Those who refinanced their mortgage last year
· And those who made any name change on the deed, because their previously filed exemption may have been removed by the tax office.

How it works:
The standard homestead exemption is an amount that is deducted from the “taxable assessed value” of your home before property taxes are figured. The process begins with the county tax assessor setting the “fair market value” on your home. The taxable assessed value is 40 percent - percentage set by state law – of the fair market value.

If, for example, your home’s fair market value is $100,000, the assessed value is $40,000. From this amount, the homestead exemption is deducted.

The standard exemption varies from county to county. In metro Atlanta, it ranges from $2,000 in Fayette County to $15,000 in Fulton County.

The exemption reduces your property taxes by $25 or so to several hundred dollars, depending on the amount of the exemption, the value of your home and your county’s millage rates.

Millage rates – the rates at which taxes are assessed – are set annually by county commissioners and county school boards to raise funds needed for government and school expenses.

In addition to the standard exemption, most counties offer additional exemptions to elderly homeowners and disabled military veterans. Some cities, including Atlanta, also offer homestead exemptions.

Exemptions dropped
All homeowners may file for the standard exemption in their county if they owned a home and occupied their home on January 1, of the year the taxes are assessed.

Once you file for the exemption, you normally don’t have to file again as long as you live in the house and make no deed changes. But tax offices may remove exemptions, sometimes by mistake or sometimes on purpose.

If you have previously filed, you need to check the property tax bill you received in the last month or two. It will show whether you are receiving a homestead exemption and the amount.

When exemptions are removed by tax offices, it normally happens because of a name change on the deed or the homeowner refinancing the mortgage.

The name change can be something as simple as a husband or wife adding his or her spouse’s name to the deed.

Some counties - but not all – require homeowners to refile for homestead exemption if a name is added to or deleted from the deed. In any case, check on your exemption if you make any deed changes.

Death may also cause a homestead exemption to be dropped.

“If you spouse died since January 1 last year, you should contact your tax commissioner about any exemption your spouse was receiving (in his or her name),” says Wingo.

In most cases when homeowners refinance their mortgage, tax offices recognized that no actual change of ownership has occurred. But sometimes, the refinancing will cause the old homestead exemption to be removed.

Some homeowners, failing to check their annual tax bills after refinancing, have paid higher property taxes for years before realizing their exemptions were dropped.

When such errors are made by the tax offices, state law limits refunds to homeowners to the most recent three years.

City Standard Approximate Filing
or County Homestead tax savings on deadline
Exemption $100,000 home

Clayton $10,000 $356 April 1
Cobb $10,000 $249 April 1
DeKalb $10,000 $390 March 1
Fayette $2,000 $50 April 1
Fulton (unincorporated) $15,000 $311 March 1
Atlanta $15,000 $725 March 1
Atlanta in DeKalb $15,000 $652 March 1
Gwinnett $8,000 $158 March 1