A homeowner's primary residence in Gwinnett County has a fair market value of $400,000 and is subject to a millage rate of 28.9 mills. The county has adopted a floating homestead exemption that freezes the assessed value at the base year level. Since purchasing the home, the fair market value has increased from $320,000 to $400,000. Assuming the assessment ratio is 40%, how much annual tax savings does the floating homestead exemption provide this homeowner compared to being taxed at current fair market value?
Correct Answer
B) $924.80, because the exemption shields the $32,000 increase in assessed value from taxation at 28.9 mills
The floating homestead exemption freezes the assessed value at the base year amount. The base year assessed value was $320,000 × 40% = $128,000. The current assessed value would be $400,000 × 40% = $160,000. The difference is $32,000 in assessed value that is shielded from taxation. Tax savings = $32,000 × (28.9 ÷ 1,000) = $924.80. The homeowner saves $924.80 annually because the increase in assessed value due to reassessment is not taxed under the floating exemption.
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A property owner in DeKalb County currently receives a homestead exemption on their primary residence. Under Georgia law, what is the correct procedure to voluntarily relinquish a homestead exemption?
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