Taxes 101

Let take a minute to break down a very otherwise boring subject.  Property taxes. Ugh, math. But property taxes fuel all of our comforts as a city.  From potholes to schoolbooks and well-maintained parks, property taxes take care of all of that.  But few of us know how they work. Let us take it one step at a time. 


First, each house is worth something.  That’s called the market value. My market value is about $200,000.  Your market value might be higher or lower. But let’s say $200,000 today.  All property taxes start with assuming your market value. Fulton County determines your market value based on housing sales in the area.

1. $200,000 Market value
2. $80,000 Assessed value
3. -$30,000 Homestead Exemption
4. $50,000 x .04319  Tax rate

This number is the number people argue with Fulton County about.  Most of the times, people argue that their market value is too high.  Later I will show you why. 


Next, after the market value has been determined, the next step is determining your assessed value.  That is always 40% of your market value. So in this case, $80,000 is the assessed value because it’s 40% of $200,000.  


So far so good.  Next, we apply the property tax rates.  Briefly, let’s examine what the rates are.  First and foremost, they are the percentage of your assessed value the government wants to tax to pay for stuff.  It is the most politically vulnerable number because who we elect will have final say in many cases on our rates. If you feel you’re paying too much then you vote for someone who wants to lower your rates.  If you feel that you are not getting enough stuff, say school books for classrooms or police patrols then you might want to vote for someone who will raise your rates. 


Before we get to what our rate is, we must understand that we pay three different places when we pay our taxes.  The City of Atlanta gets a piece, Fulton County gets a piece. The City of Atlanta School Board gets a piece. 


The total chunk that is taxed from all of us right now is 43.19 or .04319 mills.  So, with an assessed value of $80,000 x .0419 gives us a property tax of $3,455 each year.  


Finally, you have the homestead exemption.  Homestead exemption is a deduction of your assessed value before you get taxed. For all the City of Atlanta, Fulton County, and The Atlanta School Board your homestead exemption is about $30,000. Homestead exemption is given if you own your home and are living in it.  If you are renting then you do not get homestead exemption and neither does your landlord which means his or her taxes are higher and your rent might be higher and go up quicker. 


So this is how you calculate homestead.  $80,000 assessed value minus $30,000 homestead exemption gives up $50,000 x .04319 gives us $2,160 in taxes each year.  


Remember the lower your market value the fewer taxes you pay but the fewer taxes you pay the less likely roads are to be fixed and schools are to be funded.  The catch 22. 


Next, I’ll talk about the upcoming property tax legislation.




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