A Critical New Year for Filing Returns Which Are Due Soon
23 Feb 2009
This is a critical year for metropolitan Atlanta-area taxpayers to be proactive in filing returns of fair value. Failing to do so may leave taxpayers with excessive taxes based on valuations or appraisals performed long before the economic downturn -- which are now irrelevant to current market evaluations. Valuations based upon any appraisal or sale before August, 2007 are suspect. The taxing authorities may be basing taxes upon evaluations on vacant properties or which produce far less revenue than anticipated. Owners and advisors anticipating new evaluations in 2009 will be sadly disappointed because many counties will not send out new notices, hoping to maintain existing tax appraisal values, particularly if property owners have not registered an objection to the existing value by filing a new return indicating a lower value. If there is no new notice, the value remains the same, and there is nothing from which to appeal.
In Georgia, taxpayers file returns of fair market value (as of January 1) by either March 1 or April 1, depending upon the county of the location of the property. In most counties, returns must be received by the taxing authority by the deadline or postmarked by the US Postal Service (NO private meter stamps) by the deadline. Check with each county if postmarks are permitted. This is not a year where appeal rights will be nearly as important as returns, because most property values may well not be changed by the assessors.
If no return is filed for 2009, it is as if the same property is returned as the preceding year and at its previous final evaluation. Those who disagree with last year's evaluation and do not file returns will lose their appeal rights, a devastating mistake and major trap for taxpayers who expect a notice from which they can appeal. Values merely carry forward from year to year unless a return is filed in a timely manner, which is much earlier than the tax notices regarding any changes are mailed. Literally hundreds if not thousands of taxpayers will experience major surprises when they receive no notices but later do receive tax bills based upon the 2008 evaluation (and possibly at an even higher millage rate) and have no recourse.
If a value were established by an appeal, the value carries forward for the next two years, unless it is returned at a different value or if changes to the property affect its value. If the final value in an appeal is satisfactory for the next year, no return should be filed; however, continued scrutiny and vigilance are required in a period of declining values.
Atlanta and other Georgia communities had dramatic upward revisions in property assessment valuations for commercial and industrial properties in 2008 despite major reductions in actual real estate values. Landowners and their representatives should reevaluate their properties' fair market values and act timely to assert and to establish those values with the taxing authorities, addressing problems early with capable advisors. Advisors should be proactive in informing and working with their clients early and aggressively. Unfairly high taxes can be the death knell for properties, resulting in lower values, forced sales and even foreclosure because of the inability to service the taxes, insurance based on the high values, and debt service where refinancing or restructuring is difficult if not impossible. The need for early action and professional involvement in the first month or two of the new year is essential for the property owner to have the best chance to establish a fair, current, sustainable and reasonable value.
We want to make you aware of a few important developments and procedures regarding Georgia real and personal property tax laws, especially because of the probable dramatic reassessment of commercial and industrial property being discussed for Atlanta-area properties. We would also like to stress the need to be careful this year on receipt of this document because of the possibility of dramatic increases.
In Georgia, if a property assessment is changed by the assessors from one year to another, the assessors have to send out a Notice of Assessment, usually in the Spring or early Summer. If a property owner files a tax return stating his opinion of the value before the deadline (usually April 1, but March 1 in a handful of counties), then the Assessor also has to send a notice to that taxpayer unless he (the assessor) accepts the value submitted by the owner. And, more often than not, the annual Notices of Assessment will contain a bump in property taxes. You should be particularly careful this year on receipt of this document because of the possibility of dramatic increases.
This is important. In Georgia, unlike the majority of states, the appeal process is initiated by the issuance of that Assessment Notice, not by the actual tax bill. By the time you get the bill, it is generally far too late to appeal. If the owner doesn't agree with the current assessment of his property, but doesn't file a return submitting his opinion of value in the following year, then the only way that he can appeal the assessment is to hope that the county raises his value and correspondingly sends out a new notice of assessment.
Once a notice is issued the owner has 45 days (in some cases 30 days) to reject the assessment proposed by the assessor. This is done by writing a letter to the assessor appealing the assessment. If no appeal letter is sent, in a legally-sufficient form, or if it not received or postmarked within the allowed time to appeal, then the assessment stands and the taxpayer is stuck with it until the following year. You have to appeal and reserve your rights to challenge the valuation, or your rights are lost. Sometimes the valuation is determined even before the applicable millage rate.
We can send you a pdf version of the real property return form if you believe your property is overvalued based upon last year’s return.
It is critical to deal with the Assessment Notice as soon as it is received.
We wanted to make sure that you were aware that our firm does a great deal of this work, especially in the commercial and industrial property area and in the apartment, hotel, and condominium arena. We have been involved in property tax matters for many of the major land holdings in Atlanta, and we are the sole Georgia representative on the American Property Tax Counsel, a national group of law firms with this particular specialty. We would be happy to assist you and any other firms or people who you know who may need these services.
Please let us know if you have any questions or if we may be of service.