Georgia taxes 40%, not 100%
Georgia law says taxable tangible property "shall be assessed at 40 percent of its fair market value." Georgia rule: assessed value = FMV × 0.40. The most common exam error is applying the millage rate to full market value. Two other percentages float around: 75% is the level at which preferential agricultural property is assessed relative to other property, and 30% of FMV is the result of that preference (0.75 × 40%).
The order of operations
- Assessed value = FMV × 0.40
- Taxable value = assessed value − exemptions
- Tax = taxable value × (mills ÷ 1,000)
One mill is $1 per $1,000, so 25 mills is 0.025, not 0.25.
Worked example
FMV $350,000, the $2,000 state homestead exemption, 31.5 mills. Assessed = $350,000 × 0.40 = $140,000. Taxable = $140,000 − $2,000 = $138,000. Tax = $138,000 × 0.0315 = $4,347.00. Without the exemption it is $4,410.00, so the exemption saves $63. Applying 31.5 mills to $348,000 ($10,962) or to $350,000 ($11,025) skips the 40% ratio.
Exemptions stack
A local school homestead exemption stacks on the $2,000 state exemption. Same home, school tax only at 18 mills with a $10,000 school exemption: taxable = $140,000 − $12,000 = $128,000; tax = $128,000 × 0.018 = $2,304.00. Counting only the $2,000 gives $2,484.00.
Backwards, and the filing rule
A $3,120 bill on $96,000 taxable value: mills = ($3,120 ÷ $96,000) × 1,000 = 32.5 mills; FMV = $96,000 ÷ 0.40 = $240,000 — divide by 0.40, never multiply. Georgia rule: homestead must be applied for by the date the tax return books close, April 1, then renews automatically each year the owner continuously occupies the residence. The $2,000 comes off assessed value, never off market value.
Agricultural preference
FMV $600,000 at 22 mills: assessed at 30% = $180,000; tax = $3,960, versus $5,280 at the regular ratio — a saving of $1,320. Reading "75%" as 75% of FMV gives $9,900 and is the trap.