A Georgia buyer is financing the purchase of a single-family home and notices two separate tax line items at closing: one related to the deed and one related to the promissory note. Which statement correctly describes how these two taxes differ under Georgia law?
Correct Answer
A) The intangible recording tax is calculated on the face amount of the new loan at $1.50 per $500, while the deed transfer tax is calculated on the property's sale price at $1.00 per $1,000.
Georgia imposes two distinct recording-related taxes: the real estate transfer tax under O.C.G.A. § 48-6-1 is levied on the deed at $1.00 per $1,000 of the sale price (or actual consideration), while the intangible recording tax under O.C.G.A. § 48-6-60 et seq. is levied on the face amount of the promissory note (the new loan amount) at $1.50 per $500 ($3.00 per $1,000). These taxes have different tax bases, different rates, and serve different purposes.
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More Ga Property Tax Questions
A Georgia homeowner's property has a fair market value of $220,000. She does not qualify for any floating homestead exemption and receives only the standard $25,000 homestead exemption (applied to fair market value before the 40% assessment ratio). If the county millage rate is 15 mills, what is her annual property tax?
A Georgia homeowner has been receiving the standard homestead exemption on her primary residence in Atlanta. She sells that home and moves permanently to a property she previously used as a vacation home in Rabun County. What must she do regarding her homestead exemption?
A seller paid the full annual property taxes of $3,650 on January 1st for the entire calendar year. The closing takes place on September 15th, and the seller is responsible for the day of closing. Using the 365-day method, what credit does the seller receive at closing for the buyer's share of the taxes?
A Georgia owner begins an ad valorem tax estimate with the property’s fair market value. What percentage of that value is generally used as the assessment basis under Georgia law?
Marcus is a real estate agent helping a client understand property tax roles in Georgia. Which entity is responsible for determining the fair market value of real property for ad valorem tax purposes?
- → An investment property in Georgia generates $48,000 in annual net operating income. Using the income approach with a 7% capitalization rate, an appraiser determines the property's fair market value. If the county assesses at 40% of fair market value and the total millage rate is 32.5 mills, what is the approximate annual ad valorem tax?
- → Sarah is purchasing a home in Fulton County for $285,000. The property will be financed with a new mortgage of $228,000. What is the total Georgia intangible recording tax due on this transaction?
- → Lisa is a real estate agent helping her client understand closing costs in Gwinnett County. Her client asks about the difference between transfer tax and intangible recording tax. What should Lisa explain?
- → Karen is representing a seller in a transaction where the buyer is paying cash with no financing. Which of the following taxes will NOT be due at this closing?
- → Which statement about Georgia property tax administration is NOT correct?
- → A commercial property in Clayton County has a fair market value of $500,000 and qualifies for a manufacturing exemption that reduces its assessed value by 25%. Using Georgia's 40% assessment ratio, and given millage rates of 15 mills (county), 6 mills (city), and 20 mills (school district), what is the property's annual tax liability after the exemption?
- → A property owner in Clayton County receives an assessment that appears incorrect. Which of the following would NOT be an appropriate basis for challenging the assessment under Georgia law?
- → In Georgia, one mill of property tax is equal to which of the following?
- → Which statement correctly describes how real property is assessed for ad valorem tax purposes in Georgia?
- → A residential property in Fulton County has an assessed value of $280,000. The county millage rate is 8.5 mills, the city millage rate is 12.2 mills, and the school district millage rate is 18.7 mills. What is the total annual ad valorem tax for this property?
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Previous Question
A buyer in Georgia is financing $320,000 of a $400,000 purchase with a new first mortgage. How is the intangible recording tax on the buyer's note determined?
Next Question
A closing attorney in Georgia is preparing a settlement statement for a $350,000 home purchase with a $280,000 loan. How should the attorney correctly calculate the deed transfer tax and the intangible recording tax?