Georgia Court of Appeals rules against tax sale buyers

Two people who bought multiple properties at tax sales in Newton County appealed and then sued to get a lower assessment on those properties. They argued that the amount they bid at the tax sales should have served as the basis for their assessed value the following year. The Georgia Court of Appeals has ruled against the buyers.  The court determined that tax sales doesn't constitute an arm's length, bona fide sale because 1) the original owner has a year to redeem the property, and 2) the original owner is not a party to the sale.

In training sessions and conferences I've attended, officials from the state Department of Revenue always emphasize that fair market value is what a willing buyer and a willing seller would agree to at an arm's length sale. In my opinion, a person losing their property at a tax sale isn't normally "willing" nor a "seller." So this seems like a pretty good decision to me. From the Newton Citizen last week:

COVINGTON — The Georgia Court of Appeals has upheld a ruling in favor of the Newton County Tax Assessor’s Office, affirming that a tax sale does not qualify as an “arm’s length, bona fide” transaction for the purpose of setting property tax values. 

Newton County Attorney Tommy Craig advised commissioners of the court’s ruling at the June 16 Board of Commissioners meeting. “I promised you we would win this case, and now we have,” he said.

According to the Appeals Court, property owners W.D. Ballard and Nancy Mock had purchased 22 parcels of land in Newton County at tax sales during 2012. In April 2013, the Tax Assessor’s Office sent Ballard and Mock the 2013 tax values of the properties, which did not match the 2012 tax sale purchase prices. Ballard and Mock unsuccessfully appealed to the Newton County Board of Equalization and to Newton County Superior Court, which granted summary judgment to the Board of Equalization. 

Ballard and Mock had argued that under Georgia law the 2013 assessed value should have been frozen at the tax sale value. According to the law, ” … the transaction amount of the most recent arm’s length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year.” 

However, the trial court noted that the owner of property sold at a tax sale has a one-year right to redeem the property, which would essentially rescind the tax sale, and that the purchaser in a tax sale does not receive a fee simple title to the property. In addition, the court ruled that since the owner is not a participant in the sale, there is no arm’s length, bona fide sale. The Appeals Court upheld those findings. 

According to the Tax Assessor’s Office, Mock and Ballard purchased the 22 parcels, five of which included a house, between March 2012 and December 2012...

If the court had ruled the other way, it could have opened the door to confusion or discrepancies for properties that are sold in tax sales by a county and by a city during the same year.

Most metro-area governments hold millage rates steady

Several of the largest metro-Atlanta governments and school boards are keeping the same millage rates in 2015 as they had in 2014.  Gwinnett County and its school system, Atlanta Public Schools, Cobb county schools, Cherokee County Schools, and the City of Roswell all appear to be keeping the same property tax rate this year as last year.  However, growth in property values in some of those jurisdictions means that some of them may have advertised property tax increases under state law.

A few jurisdictions in the area are actually proposing millage rate decreases.  Those include the City of Decatur, DeKalb County, and Henry County.  But those millage rate reductions may be offset or cancelled out on tax bills by increases in property values.

The Forsyth County school system is proposing an increase in their millage rate of 1 mill.

Governor vetoes tax credits for insurance companies

After approval by the General Assembly, Gov. Nathan Deal signed almost every tax-related bill that made it to his desk this year.  The main exception was House Bill 439, which would have created up to $55 million in insurance premium tax credits for insurance companies that invest in low-income communities in Georgia.  Deal vetoed HB 439 saying that it "would have too much of an impact on the general fund."  The Georgia Budget and Policy Institute called the proposal "complex," "unaccountable," and a "bad investment" that has worked poorly when tried in other states.  GBPI estimated that the credits would have totaled up to $139 million over the next seven years.

Insurance companies pay annual insurance premium taxes to the state which are partly distributed to cities and counties.  The City of Decatur receives approximately $1 million annually in insurance premium taxes.  Insurance companies also pay occupation taxes directly to Georgia's local governments if they write policies in those jurisdictions.

City offers payment grace period until June 15

Property taxes in Decatur were due June 1. But the City offers a 10-business day grace period during which no penalties or interest apply to late payments. That grace period will end on Monday, June 15.

Property tax payments due today, June 1

Real property tax payments for Decatur's first installment billing for 2015 are due today.  Payment for commercial sanitation services including dumpster and cart service for 2015 is also due no later than June 1.

If you recently made a payment but you don't see that payment reflected on our website, please keep in mind that, even for in-person payments, it may take 7 to 10 business days after your check has cleared before your payment is applied to your account. We honor postmarks, so don’t worry about additional interest accruing if you mailed your payment in on time.