Quick answer
Georgia taxes property on 40 percent of its fair market value, not the full value. Multiply the market value by 0.40 to get the assessed value, subtract any exemption, then apply the millage rate, where one mill is one dollar per thousand dollars of assessed value.
Real estate calculations carry 7 percent of the national portion, and Georgia adds its own assessment ratio on top. The arithmetic here is simple. The failure is always the same one: applying the millage rate to the market value, because the question hands you the market value first and that is the number sitting in front of you.
The three steps
Step one: assessed value. O.C.G.A. § 48-5-7 sets the ratio at 40 percent of fair market value.
$380,000 market value multiplied by 0.40 is $152,000 assessed.
Step two: subtract exemptions. A homestead exemption reduces the assessed value before the rate is applied, not the tax afterwards. If the exemption is $10,000, the taxable value becomes $142,000.
Step three: apply the millage. One mill is one dollar of tax for every thousand dollars of taxable value. Divide by 1,000 and multiply by the number of mills, or convert the millage to a decimal by dividing by 1,000.
At 29 mills: $142,000 divided by 1,000 is 142, and 142 multiplied by 29 is $4,118.
The rule
Market value, then 40 percent, then exemptions, then millage. In that order. Skipping the 40 percent step inflates the answer by two and a half times, and that inflated number is always one of the choices.
Millage in the three forms a question can use
The same rate gets written three ways and you should be able to move between them without thinking.
| Form | Example | Convert to decimal |
|---|---|---|
| Mills | 29 mills | 29 divided by 1,000 equals 0.029 |
| Dollars per thousand | $29 per $1,000 | Same thing, 0.029 |
| Percentage | 2.9 percent | Divide by 100, 0.029 |
A question that gives you "$29 per $1,000 of assessed value" and a question that gives you "29 mills" are the same question. One mill is one tenth of one percent.
Working a full one
A house in Gwinnett County has a fair market value of $465,000. The owner has a $12,000 homestead exemption. The combined millage rate is 32.5 mills. What is the annual tax?
- Assessed value: $465,000 multiplied by 0.40 equals $186,000.
- Taxable value: $186,000 minus $12,000 equals $174,000.
- Tax: $174,000 divided by 1,000 equals 174, multiplied by 32.5 equals $5,655.
Now the trap answers a test writer would build from that:
- $15,112.50, from applying the millage to the full market value.
- $6,045, from forgetting the exemption.
- $5,889, from subtracting the exemption from market value before taking 40 percent.
Every one of those is a single skipped or reordered step. That is what the question is measuring.
Working backwards
The exam also runs the calculation in reverse, which is worth practising because the arithmetic feels unfamiliar under time pressure.
A property is taxed $3,600 a year at 30 mills with no exemption. What is its fair market value?
- Taxable value: $3,600 divided by 0.030 equals $120,000.
- That is the assessed value, which is 40 percent of market value.
- Market value: $120,000 divided by 0.40 equals $300,000.
Dividing by 0.40 rather than multiplying is the step people get backwards. A sanity check helps: market value must always be larger than assessed value in Georgia, so if your answer is smaller, you have divided the wrong way.
Exam trap
A question may give a county assessment ratio different from 40 percent to see whether you are applying the number in front of you or the one you memorised. Read the question. If it states a ratio, use the stated ratio.
The math drill serves these until the sequence is automatic, the formula sheet has the assessment ratio written next to the transfer tax rates so the Georgia numbers sit together, and the assessment ratio glossary entry has the one-line version.
Check yourself
1. A Georgia home has a fair market value of $325,000. What is its assessed value?
Show the answer
Answer: B. Georgia assesses at 40 percent of fair market value. $325,000 multiplied by 0.40 is $130,000.
2. A property is assessed at $88,000 after exemptions. The millage rate is 27 mills. What is the annual tax?
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Answer: A. $88,000 divided by 1,000 is 88, and 88 multiplied by 27 is $2,376.
3. A home has a fair market value of $410,000 and a $15,000 homestead exemption. The millage rate is 31 mills. What is the annual tax?
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Answer: C. Assessed value is $410,000 multiplied by 0.40, which is $164,000. Less the $15,000 exemption leaves $149,000. Then $149,000 divided by 1,000 is 149, multiplied by 31 gives $4,619. Choice A skips the assessment ratio and applies the millage to market value.
4. A Georgia property is taxed $4,200 annually at 35 mills with no exemptions. What is its fair market value?
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Answer: B. $4,200 divided by 0.035 gives an assessed value of $120,000. Assessed value is 40 percent of market value, so $120,000 divided by 0.40 is $300,000.
FAQ
Does every Georgia county use 40 percent?
The 40 percent ratio is set by state law for taxable tangible property. Millage rates differ enormously between counties and cities; the assessment ratio does not. If an exam question states a different ratio, use the one it gives you.
Is the homestead exemption subtracted before or after the millage?
Before. It reduces the assessed value, and the rate is applied to what is left. Subtracting it from the tax at the end produces a wrong answer that the exam will offer you.
What is a mill?
One dollar of tax per one thousand dollars of taxable value, which is one tenth of one percent. Thirty mills is 3 percent of assessed value.
Does the tax assessor's value equal market value?
It is meant to approximate it, and owners can appeal when they disagree. On the exam, treat the fair market value given in the question as the starting point and apply the ratio to it.