HB 581 and Homestead Exemptions

• Georgia HB 581 aims to provide homestead tax relief to homeowners across the state, not just Chatham County
• HB 581 was passed by the Georgia Legislators in 2024 and approved by voters in November 2024
• HB 581 is a statewide exemption that mirrors Chatham County's 1999 Stephens-Days Exemption
• Local Governments must ‘Opt- In’ or ‘Opt-out’ of HB 581 by March 1, 2025

What are Homestead Tax Exemptions?

• They help prevent large increasing property tax assessment due to growth and help control rapid increases in property assessments.

How will HB 581 impact my taxes or my base tax-year?

• Opting in or out WILL NOT change your base tax- year if you are currently under Stephens-Day.
• Base tax years only change when you sell, transfer, or improve your property
• HB 581 states in Counties with multiple exemptions, the taxpayer shall receive the one will the greatest tax reduction 
• Georgia HB 581 aims to provide homestead tax relief to homeowners across the state, not just Chatham County
• HB 581 was passed by the Georgia Legislators in 2024 and approved by voters in November 2024
• HB 581 is a statewide exemption that mirrors Chatham County's 1999 Stephens-Days Exemption
• Local Governments must ‘Opt- In’ or ‘Opt-out’ of HB 581 by March 1, 2025

• Chatham County has the first Homestead Exemption ever passed in Georgia
• Stephens-Day is a local homestead tax exemption in existence since 1999, widely considered the best in GA.
• Stephens-Day has been ligated, amended, and improved throughout its 25 years
• HB 581 is new and will require adjustments. 

• Property Value Freeze
  -The Stephens-Day Exemption freezes your home value to the  base year value, providing stability.
  -This allows for gradually increases in home-value based on inflation is some cases.
  -This also instructs that the base year value is frozen and does not increase in some cases (eg Chatham County property tax)
• Protection from Tax Increases
  -This exemption protects homeowners from sudden and rapid increases in property taxes, promoting affordability.
• 25 Years of Stability
  -Stephens- Day has been litigated and amended throughout its 25 years of existence and is considered the best homestead exemption in the State of Georgia.

Q: “Am I going to be paying more taxes?”
A: No, HB 581 states: In counties with multiple exemptions, the taxpayer shall receive the one that provides the greatest tax reduction. Regardless of whether the City of Savannah opts in or opts out, nearly all Chatham County residents with the Stephens-Day Homestead Tax Exemption will remain within that exemption.

Q: “Will there be any increases for your valuation with House Bill 581 versus opting out?”
A: No, opting out will result in keeping Chatham County tax exemptions the same as they currently are. Chatham County has one of the best homestead tax exemption laws in the State of Georgia (Stephens-Day), which has been improved over its 25-year history.

Q: “Based on the Georgia Municipal Association, it reads as if cities already get whatever is better for homeowners, so why is there a need to opt out?”
A: HB 581 is a statewide measure designed to provide homestead exemptions to counties all over Georgia, many of which do not have any homestead tax exemption within their jurisdiction. Although the property owner will always receive the exemption that provides the most benefit, HB 581 will require more administrative work from the County Tax Assessor’s Office to track the new exemption. Spending public tax dollars to track an exemption that will rarely be used is inefficient and wasteful because Chatham County already has a homestead exemption. Additionally, multiple exemptions can lead to public confusion.

Q: “Please clarify parts of HB 581 that can’t be opted out of and changes to the appeals process.”
A: HB 581 has three parts:

• Part 1: Property Tax Procedural Changes (cannot be opted out of)
• Part 2: Statewide Floating Homestead Exemption (can be opted out of)
• Part 3: New Local Option Sales Tax Opportunity (dependent on each county’s exemption status)

HB 581 also modifies the three-year lock for appeals so that the taxpayer only receives the lock if they receive a value reduction upon appeal.

Q: “If you are claiming homestead illegally, for example with STVRs, is that considered fraud and/or what are the penalties?”
A: The City's Short Term Vacation Rental Ordinance defines owner-occupied property as:

"Real property which contains one or more dwelling unit(s) where the principal dwelling unit must be occupied by the property owner and constitute his/her primary and usual place of residence. The dwelling units must share the Property Identification Number assigned by the Chatham County Board of Assessors. Proof of owner-occupancy requires proof of a valid homestead exemption submitted with the application for a short-term vacation rental certificate. In lieu of a homestead exemption, a sworn affidavit and supporting documentation establishing proof of residency must be submitted by the applicant stating that the primary dwelling unit is the legal residence and domicile of the resident. Proof of residency is required in the form of two of the following: (1) a valid Georgia Driver's License or Georgia Identification Card; (2) registration for vehicles owned by and registered in the name of the applicant; (3) Chatham County Voter's Registration Card; or (4) the previous year's W-2 form or Internal Revenue Service tax return."

The Chatham County Board of Assessors issues homestead exemptions—which the City verifies before issuing an STVR certificate. For properties where owner-occupancy is demonstrated through proof of residency, the City ensures that all required documentation has been submitted and verified before granting an STVR certificate.

Q: “Since this matter was voted on in November, can you clarify how that affects what’s going on now? There is concern that some people didn’t know what they were voting on.”
A: In 2024, state legislators voted to place this new homestead exemption on a ballot for voters to decide the next step. Voters passed HB 581, which now requires each local governments to pass a resolution either opting out or remaining included within HB 581.

Q: “Clarity on the Stephens-Day exemption still applying with/without opting out of HB 581.”
A: HB 581 states that in counties with multiple exemptions, the taxpayer shall receive the one that provides the greatest tax reduction. Regardless of whether the City of Savannah opts in or opts out, nearly all Chatham County residents with the Stephens-Day Homestead Tax Exemption will remain within that exemption.

Q: “There was an example of how HB 581 mandates a reassessment of homes every 3 years. Any more information that can be clarified on how this also affects the valuation of homes.”
A: HB 581 modifies the three-year lock for appeals so that the taxpayer only receives the lock if they receive a value reduction upon appeal. Additionally, HB 581 requires that the chief appraiser ensure that every parcel in the county is appraised at least every three years.

Q: “If we opt-out, can we opt back in later?”
A: If a local government opts out, there is no future opportunity for the local government to opt in or rejoin the HB 581 exemption. However, a local government may still obtain a similar homestead exemption in a traditional manner. The General Assembly may pass a local act creating an equivalent local floating homestead exemption.

Q:"Has the city conducted any studies or analyses that would show the total amount of inefficient funds or repercussions that would be inflicted onto the city's budget and staff due to the implementation of HB 581?"
A:The City of Savannah does not operate or fund the Chatham County tax accessor’s office, who would have the responsibility to track the additional exemption rate if any jurisdiction in Chatham County opted into HB 581.  What we understand from conversations with the county and with the state department of revenue is that the added exemption would create new responsibilities within a tax assessor’s office which would likely lead to new costs for staff and systems to increase the capabilities of the office. We view this as a con to opting in for the primary reason that in virtually all instances, Stephens-Day will provide the taxpayer the greater benefit of the two exemptions, so the return on investment for taxpayers on the cost to implement is negative. 

The city is paying close attention to any information coming out of the county or the tax assessor’s office about any potential impact of opting in or opting out.

Q:" What types of home improvements would cause my property's base value to be reassessed?"
A: Instead of thinking of it as a reassessment, it's more accurate to say that the exemption is modified based on the contributory value of a significant change.

A clear example is adding square footage to your home. For instance, if you add a bedroom, that addition increases the property's value. Instead of resetting or fully reassessing the base year value, the additional value is incorporated into it.

For example:

• If an addition adds $30,000 in value, that amount is added to the base year value of the exemption.
• Conversely, if a demolition reduces the property's value by $30,000, that amount is subtracted from the base.

This approach ensures that the base value reflects only the net impact of significant improvements or reductions.