Making sense of your taxes
Clayton County homeowners are getting their annual property tax assessment estimates in the mail. For some, an increase in property value may be great news. For others, it could place them in danger of being priced out of their own homes. That’s a big deal because, for homeowners, most of their tangible wealth is tied up in their homes. But there are several steps homeowners can take to keep that roof over their heads.
How the county decides what your property is worth for tax purposes
Take a look at your assessment. You’ll see two numbers:
- Appraised value: This is the number that the county tax assessor’s office has calculated as your home’s fair market value. (Your home includes your house, the lot it sits on, and any outbuildings or other structures that might be included in your individual real property record.) Fair market value is not the same thing as the asking price for your home. It is a baseline that takes into account other homes around yours, as well as general market conditions like whether homes are selling or not in your area. That baseline number is 100% of what the county considers your house to be worth and is largely based on square footage and the general age and condition of your property. For example, if you’ve added a room to your house, that would likely increase your fair market and assessed values. Those values do not take into account specific cosmetic remodels like your new kitchen countertop or laminate floors. Those things (and many others, like market conditions) are taken into account by real estate agents, who get into the individual details of what sets your home apart from others in your neighborhood when you get ready to sell.
- Assessed value: This figure is 40% of the county-appraised value. That means you only pay taxes on 40% of what the county says your property is worth. The other 60% is tax-free.
If you look below the appraised and assessed values, you’ll see another box with numbers that are the actual taxes that the county is charging you for your home. Those might vary, depending on whether or not you are in unincorporated Clayton County. They do not include any municipal taxes or fees (like fire services) if you live in one of the incorporated municipalities. You’ll see a tax for “Fire,” with a $14,000 exemption, at a millage rate of .004750 on the remaining portion of your 40% assessed value, if you live in unincorporated Clayton County.
For someone living inside the boundaries of an incorporated city like Forest Park, Lake City, Jonesboro, Riverdale, or Morrow, your county property tax assessment will look something like this:
The county tax assessment does not include any city taxes or fees. Each city bills those separately.
On your county tax assessment, you’ll see three different “taxing authorities,” or taxes:
- State Tax: This is a tax that the State of Georgia places on your home. By state law, if you live in your home, you are eligible for a $2000 exemption—a discount because you actually live there as opposed to renting it out to someone else. To get your $2,000 exemption, you must file a simple application one time. If you haven’t filed your homestead exemption, you can do that here. That’s $2,000 savings in your pocket every year that you live in your primary home. Over a 30-year mortgage, that’s $60,000 you could be saving and earning interest on or spending on other wants and needs.
- County M&O: This is your Clayton County tax. It does not include the public school system, which is taxed separately. It pays for
- School M&O: This is your Clayton County Public Schools tax, which pays for teachers, new construction, maintenance, textbooks, computers, etc.
Understanding homestead exemption
Next to each of these taxes, you’ll see an exemption. That’s the dollar amount you do not have to pay taxes on:
- For the state tax, that’s $2,000 under state law (O.C.G.A. § 48-5-44). If you want to complain about that one, you’ll have to take it up with your state lawmakers.
- For the county M&O tax, that’s $10,000—meaning the first $10,000 of your home’s appraised value (the 40% the county taxes you on) will not be taxed by the county. For example, if you own a modest home assessed at $130,500 and appraised for tax purposes at $52,200, you would be taxed on that $52,200 minus the $10,000 exemption. That means the county would tax you on $42,200 of your home’s assessed value.
- Similarly, for the schools M&O tax, the county also would give you a $10,000 break on the assessed value, taxing you only on $42,200.
If you are a veteran, over 62, disabled, or the surviving spouse of a law enforcement officer or servicemember killed in the line of duty, you may be eligible for other property tax exemptions. Call the Tax Commissioner’s Office at (770) 477-3311 or e-mail firstname.lastname@example.org to find the exemption that works best in your situation.
How your tax is calculated
When you hear your local and county officials announce millage rate hearings, this is what that’s about. The governing body—whether the Board of Commissioners, the Board of Education, or your city council—sets the millage rate. In plain English, the millage rate is a fraction that the government decides you have to pay on your property value to keep public services running. It’s not a percentage, but the principle is the same:
- A percentage is based on 1/100.
- A millage is based on 1/1,000.
Often, you’ll hear politicians talk about the millage rate “not increasing” or “staying the same as last year.” While that sounds great in isolation, millage rates are not the only thing that determine whether property taxes go up or down. For example, if the real estate market is hot and home values increase significantly over the previous year, as in Clayton County, a significant increase in home sales prices means the government doesn’t have to raise the millage rate. If home prices double, so does the government’s cut. Similarly, if the market cools off and home values drop significantly, as they did after the 2008 mortgage lending crash, your elected officials may say they need to raise the millage rate in order to keep providing services like libraries and street repairs and to avoid laying off public employees.
Similarly, a millage rate “rollback” or “decrease” does not automatically translate into lower property taxes. If real estate prices are extremely high, cutting the millage rate just means that the government will take a smaller fraction of your new, higher assessed property value.
We looked at county millage rates since 2020 and found:
- School M&O has remained unchanged at 20 mills.
- Fire (f0r those who pay it) went down from 4.906 mills in 2020 to 4.75 mills in 2021 and has stayed the same ever since
- County M&O has fluctuated, from 15.089 mills in 2020, down to 14.746 in 2021, up to 14.496 in 2022, and back down to 14.476 in 2023. Last August, the county issued a public notice, clearly stating that the lower millage rate would still mean an 8.59% increase in property taxes.
And yet, many say they are surprised.
Homeowners aren’t happy
The 2023 assessments saw significant dollar increases for local homeowners, who told The Clayton Crescent they were shocked by the bottom line and complained that they had not seen any improvements in their neighborhood:
Property taxes can go up when the value of your home goes up. And the fact that Clayton County is cheaper than any other county in the metro has a lot to do with why home values are up, even if you don’t see any improvements in your neighborhood. Fewer affordable houses and high demand make Clayton County homes desirable—even if your siding is 30 years old or if your neighbors don’t cut their grass.
This year’s assessments are a case in point of why a millage rate decrease does not equal a tax decrease. They also show that property values are influenced by factors other than keeping up with the Joneses.
In September 2022, The Clayton Crescent spoke with GSU Professor of Urban Studies Dan Immergluck about his book Red Hot City, which delves into the metro Atlanta housing market. While the book only touches on Clayton County, Immergluck spoke to us about “displace and replace,” where older, less-expensive apartments are replaced by “market rate” housing in hopes of raising the local tax base and driving out supposed undesirables (read: low-income renters) by charging higher rents. This, Immergluck says, disproportionately affects Black and Hispanic/Latino communities. So does predatory lending, which has been an ongoing problem in Clayton County. Numerous homeowners defaulted on subprime mortgages after 2008 and many of those homes were snapped up by corporate investors. That, in turn, concentrated more homes under fewer owners, driving up prices and making it harder for people to buy their own homes. As word got out that Clayton County had lots of cheap houses, investors snapped up the available housing stock. And as property values and demand rose, so did rent prices and evictions—with Black families hit hardest, according to Immergluck. He also expressed concern that government entities are offering too many subsidies for warehouses, at the expense of taxpayers, in exchange for relatively few low-paying jobs.
See past millage rates for Clayton County
Because everybody is assessed at the same millage rate (not counting exemptions), that means low- to moderate-income people with modest homes essentially pay a larger chunk of their income towards property tax than do wealthier people with expensive homes. This is particularly so for seniors, who make up a growing population in Clayton County.
Those fractions for your 2023 property tax assessment include:
- State tax: In our example, the millage rate is zero
- County M&O: The current county millage rate (excluding schools) is .014746
- School M&O: The current school millage rate is .020000 (or .02)
Your estimated tax
This is the dollar amount that the county estimates you will need to pay for 2023. This number can change between now and tax time—especially if you file for one or more tax exemptions for which you may be eligible. It’s mainly a heads-up so that you can take action to lower your property taxes and/or plan your finances in the months leading up to when you get your actual tax bill for 2023. If you’ve already claimed your exemption(s) and are not eligible for more, these numbers are a pretty good indication of what you can expect to pay. These numbers also can change if something bad happens—for example, if your house burns down or is severely damaged in a way that devalues your property before tax time. You don’t want to pay property taxes on a house if your house has burned down and you now own an empty lot. Be sure to consult the tax assessor’s office (not the tax appraiser’s office!), your insurance company, your attorney, and your financial advisor if you find yourself in this situation.
You can appeal your assessment but consider this: If the appeal finds your house is worth more, you may wind up paying even higher taxes. If the appeal finds your house is worth less, you might get less when you sell it. Before filing an appeal, be sure to get an independent appraisal.
In our example, the homeowner’s taxes add up to:
- State tax: $0
- County M&O: $622.28
- School M&O: $844
- Total estimated 2023 Clayton County property tax: $1,466.28
That $1,466.28 might look like nothing if the homeowner is making more than the median income. It might look like disaster to people earning at or below Clayton County’s median income of $26,366 for individuals or $49,460 for households. (These income figures are from 2020, which was when the last U.S. Census was done.)
Priced out of your home?
And that’s why millage rates don’t tell the whole story. This example doesn’t even take into account things like high food prices (up a whopping 8.3% nationally as of March, which is the most recent figure available) and utility price increases (10.2% nationally for electricity and 5.5% nationally for natural gas).
Renters are not immune to price increases, with rents up 8.8% nationwide in March. Part of making a profit as a landlord involves passing along expenses to tenants. When property taxes go up, rents do, too. That’s why it’s important for renters—not just homeowners—to pay attention to millage rates and property values in the area. It takes time to save money and to relocate to a more affordable place. If you need help with rent, the Clayton County Community Services Authority will reopen applications on May 15.
When an area becomes too expensive for the people already living there, wealthier homebuyers and investors often snap up real estate, which drives up prices. When this happens to long-established neighborhoods and communities, particularly low-income and/or minority communities, longtime residents might have to sell their homes and move away, and the culture and history of a place disappears. (That’s gentrification.)
Guarding your real estate
If your mortgage is paid off, it’s even more important for you to watch and to plan for your property tax bill. Try dividing the bill by 12 and setting aside that amount each month in a separate account just for your annual property taxes. In recent years, many Clayton County homeowners have lost their most valuable asset over a several-thousand-dollar (or less) tax bill.
If your mortgage company has your taxes and insurance in escrow, consider paying your tax increase and any homeowner’s insurance premium increase in one lump sum if you can. That will keep your current payment about the same. Otherwise, you could throw an extra payment or two into your escrow account before the new valuations take effect and your monthly payment increases. You can look into refinancing your mortgage at a lower interest rate if your credit’s in good shape. Make sure you’re getting all possible discounts on your homeowner’s insurance and shop around for better rates for the same coverage.
Be sure that you have a will that clearly states who is supposed to get your property should you die. Otherwise, your beneficiaries could get hung up in court while your estate is in probate, which adds to their stress and expense.
Maybe you want to cash out and move someplace else, which can be tricky when it costs you double or more to find a comparable home elsewhere. You might want to consider saving up a “moving fund” before you take the leap. Do comparisons on Sperling’s Best Places and do your own in-person and online research about where you think you want to go and why. Spend a few weekends getting to know the local grocery stores, restaurants, parks, and general vibe and check out the local news sources. Get to know some of the locals and what they like and dislike about the area. Find out what job prospects are like. Know which parts of town are polluted or have high crime.
Another option that might make financial sense is renting out your home and keeping it as an income stream. You’ll want to research what that takes: You’ll have to decide whether you are willing and able to deal with repairs and deadbeat tenants, whether to hire a management company to handle the property for you, or to cash out and move on. Consult with experienced landlords and real estate professionals. You also can learn more about rental properties at the Clayton County Library.
See what these resources say about living in Clayton County:
- Sperling’s Best Places‘ calculator lets you compare the cost of living in your current city versus other places. Note: Some of their data may not be current. Also, many factors go into whether or not any given place may work for you, like the political climate, available hospitals, and arts and culture.
- Invest Clayton: The Development Authority of Clayton County has information on local wages and household income, cost of living, and workforce, all aimed at potential investors. (Some of the data does not indicate how current it is.)
- U.S. Consumer Price Index: This information is updated quarterly. The most recent data is from March 2023. Average weekly wages in Clayton County as of September 2022 were $1,233, up about $5 (or 0.4%) per week since the previous year, for an average annual wage of $64,116 per year. A wage increase is not a raise, but an increase in overall wage related to inflation. While housing costs in Clayton County are about half of those in the rest of metro Atlanta, we still tend to spend more money on commuting and spend about the same on other consumer items, food, and utilities. That average 0.4% weekly wage increase is a tiny fraction of what surrounding metro Atlanta counties got:
- Fulton: 8.5% wage increase
- Dekalb: 8.3% wage increase
- Henry: 7.5% wage increase
- Fayette: 12.5% wage increase
- Gwinnett: 8.6% wage increase
- Cobb: 4.7% wage increase
- Douglas: 12.7% wage increase
- Spalding: 11.5% wage increase
- Newton: 13.9% wage increase
- Rockdale: 8.2% wage increase
- Timeout.com has a list of the 10 cheapest places to live in the U.S. right now. The story talks about median rent prices for a studio apartment and mentions local amenities, but doesn’t delve into things like transportation or utility costs.
- Homebay.com looks at the reasons why people are moving (nationwide) and the fact that 75% of people who did move regretted it later. 61% of people who moved relocated within 20 miles of their old home.
- Done with Georgia? Here are 10 places that will pay you to move to their state.
Of course, it’s in a government’s best interest to want to keep people from voting with their feet.
Getting your money’s worth
If you are unhappy with your tax assessment or with anything else about the local quality of life, let your elected officials know how you want them to spend your tax dollars: should we build a few new large school buildings, or build many smaller schools with smaller classrooms and more teachers, for example? Do you think the county or municipality is wasting money on less important things that could go to more important needs? Should the government be in the business of party planning? Is the government not providing a necessary service? What makes a budget request a need versus a want? Those are questions you can think about, research, and discuss with your friends and neighbors.
You can make your voice heard during public comment periods, by writing an e-mail or a letter to your elected official, and by making an appointment to meet with your elected official. If that doesn’t work, you can protest, circulate a petition, or vote them out of office.
You can pay attention to local news outlets like The Clayton Crescent, which gives detailed dives on things like millage rate increases, and the county paper of record, the Clayton News, where the county and municipalities are required—by law—to publish public notices about millage rate and budget hearings, among other things.
It’s worth nothing that, despite the fact that all county, school, and municipal millage rate hearings were publicized, almost no one attended to let their elected officials know whether they approved of the current millage rates and tax increase or not. Now, many people are complaining about how much their annual property tax bill will cost them. But the die is cast for 2023.
Your next chance to tray and influence your elected officials about property taxes—for 2024—will come late this summer. But local real estate experts say prices in Clayton County are likely to rise over the next few years.