How HB 581’s Floating Homestead Exemption Works
Georgia's House Bill 581, passed by the state’s General Assembly in 2024 and approved by voters in a November 2024 statewide referendum, creates a new type of property tax relief called a "floating homestead exemption."
The term "floating" in the context of HB 581's homestead exemption refers to the dynamic nature of the exemption's value.
Think of the floating homestead exemption like a protective shield for your home's taxable value:
Base Year: If you have the homestead exemption, 2024 is the "base year" for your home's taxable value.
Limited Annual Increases: After that, your home's taxable value can only increase by the state’s annual inflation rate, which will likely be based on the Consumer Price Index (CPI).
The "Floating" Part: The difference between your home's actual market value and the inflation-adjusted value becomes your exemption amount — it "floats" up as the gap increases.
Example HB 581 Calculation:
2024 fair market value for a home: $300,000
2024 assessed value (40% of market): $120,000
Now in 2025:
Market value increases to $330,000 (10% increase)
Without the exemption, the new assessed value would be $132,000 (40% of $330,000)
But with inflation at 3%, your assessed value can only rise to $123,600 ($120,000 + 3%)
Your floating exemption amount is $8,400 ($132,000 - $123,600)
This $8,400 is your "floating" exemption; it represents the portion of your assessed value exempt from taxation due to HB 581's cap on assessment increases.
Local governments can still increase the millage rate (the tax rate) to raise revenue, even if your home’s assessed value is capped.
Why Was The Save The Homes Act Created?
The "Save the Homes" Act was designed to:
Protect homeowners from being "taxed out" of their homes when property values rise sharply
Provide more predictable property tax bills that increase more gradually
Help long-term residents stay in their homes, especially in neighborhoods experiencing rapid value increases
Think of it like a speed limit for your property taxes — they can still go up, but not as quickly as they might have otherwise.
A key aspect in understanding the structure of HB 581 is its resemblance to Chatham County's Stephens-Days Homestead Exemption, which has been in place since 1999.
HB 581's statewide floating homestead exemption mirrors Chatham County's existing Stephens-Days Homestead Exemption, aiming to broaden a successful local tax relief model across Georgia.
One notable difference between these two exemptions is that counties, cities, and school districts were allowed to opt in or out of the “floating homestead exemption.”
Local Government Response: The Opt-In/Opt-Out Landscape
HB 581 included a provision allowing counties, consolidated governments, municipalities, and local school districts a one-time opportunity to opt out of the statewide floating homestead exemption.
Governing bodies planning to opt out were required to hold three public hearings and file evidence of hearings and a resolution with the Secretary of State’s office by March 1, 2025.
Below are the differences and reasons for some local governments opting in or out.
Opted In | Opted Out |
|---|---|
The floating exemption applies (or whichever exemption benefits the homeowner more). | Many counties and cities already had local homestead exemptions, some offering greater or different forms of relief than the new statewide floating exemption. |
It could provide immediate property tax relief to homeowners in counties with limited pre-existing homestead exemptions. | School districts were concerned with reduced revenue growth due to slower property tax collections if property value growth exceeded inflation. |
Counties and municipalities could implement a new Floating Local Option Sales Tax (FLOST) of up to 1% to offset property taxes Important: School districts cannot participate in the FLOST, which is one reason many have opted out. |
Who Opted In and Who Opted Out?
Below are major counties and school districts that opted in or opted out of HB 581’s floating homestead exemption:
Jurisdiction | Opt-In/Opt-Out |
|---|---|
Atlanta (City) | Opt-Out |
Barrow County Schools | Opt-Out |
Bartow County Schools | Opt-Out |
Bibb County Schools | Opt-Out |
Butts County Schools | Opt-Out |
Catoosa County | Opt-In |
Catoosa County Schools | Opt-In |
Chatham County | Opt-Out |
Chatham County Schools | Opt-Out |
City of Lilburn | Opt-In |
Clarke County Schools | Opt-Out |
Clayton County | Opt-Out |
Cobb County | Opt-Out |
Cobb County Schools | Opt-Out |
Dalton Public Schools | Opt-Out |
DeKalb County | Opt-Out |
DeKalb County Schools | Opt-Out |
Dougherty County Schools | Opt-Out |
Douglas County Schools | Opt-Out |
Dublin City Schools | Opt-Out |
Forsyth (City, Monroe Co.) | Opt-In |
Fort Oglethorpe (City, Catoosa Co.) | Opt-In |
Fulton County | Opt-Out |
Fulton County Schools | Opt-Out |
Gwinnett County | Opt-Out |
Gwinnett County Schools | Opt-Out |
Heard County Schools | Opt-Out |
Houston County Schools | Opt-Out |
Lowndes County | Opt-Out |
Monroe County | Opt-Out |
Newton County | Opt-In |
Newton County Schools | Opt-Out |
Oglethorpe County Schools | Opt-Out |
Palmetto (City) | Opt-Out |
Ringgold (City, Catoosa Co.) | Opt-In |
Savannah (City) | Opt-Out |
Social Circle (City) | Opt-Out |
Ware County Schools | Opt-Out |
Whitfield County Schools | Opt-Out |
The Potential for Divergence: Two Separate Local Tax Systems?
Georgia’s allowance for local governments to opt out of the statewide floating homestead exemption has created the potential for developing two distinct local tax systems operating in parallel across Georgia.
1. Divergence in Property Tax Relief
The divergence for homeowners who live in school counties or districts that opted in could face significantly different property tax regulations and varying degrees of tax relief, despite their properties having similar market values.
2. Revenue Complexities
HB 581 will likely increase administrative complexities for the Georgia Department of Revenue and county tax assessors. They will need to manage and track two different sets of property tax rules depending on each local government entity's opt-in or opt-out status within their jurisdiction.
Additionally, the optional FLOST will create disparate local tax burdens across the state. For example, residents in counties where the FLOST is implemented could experience a different overall tax burden than those who opted out of the floating homestead exemption or could not implement the FLOST.
3. Intrastate Movement
While the impact is uncertain, different local tax systems could influence decisions about where individuals, families, and businesses choose to reside or locate, as tax burdens are often a factor in such considerations.
Lastly, areas that adopted the floating homestead exemption could experience structural disincentives for new homebuyers since the base year assessed value resets upon a property's sale.
The Future of Property Taxation in Georgia
Georgia's experiment with the floating homestead exemption represents a significant shift in the state’s property tax law. As with any major change, the system will likely be adjusted and tweaked over time.
The first revision already occurred with House Bill 92 in 2025, which allowed local bodies to rescind their decision to opt out of the statewide homestead exemption by April 30, 2025. The majority stuck with their original decision to opt out.
As a homeowner, it's worth staying informed about:
Which exemptions apply in your jurisdiction (county, city, and school district)
How your local governments have chosen to implement the new system
Additional changes might be coming in future legislative sessions
Understanding how these changes affect your property taxes helps you better prepare for the future and take advantage of available tax relief programs.
At Ownwell, we’re committed to keeping Georgians informed about their property taxes. We can also help homeowners and commercial property owners appeal their property taxes today.
Don't let rising property values increase your taxes for the next three years. Appeal with Ownwell today to ensure a great appeal result that will lock in your assessed value.
