Ga. Court of Appeals Property Assessment Opinion | Nathan E. Huff
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Ga. Court of Appeals Property Assessment Opinion

If you have been following my other blog (augustacommentator.com), then you probably know that one of my favorite topics is property tax assessments. Today the Georgia Court of Appeals issued an opinion dealing a blow to the Fulton County Board of Assessors. click here for the opinion

In this case the plaintiff bought a residential property from Freddie Mac in 2011 for $207,000. Pursuant to Georgia law, in the year following the purchase of the property (assuming it was an arms-length transaction), the tax assessor may only assess the property at a value no greater than its purchase price. Therefore, pursuant to Georgia law, as long as the plaintiff’s purchase was a bona fide arms-length transaction, the assessed value of the plaintiff’s house for 2012 could not exceed $207,000.

Despite this, the Fulton County Board of Assessors appraised the property at $370,000. After an appeal to the Board of Equalization the house was assessed at $340,000. The plaintiff appealed that decision to the Superior Court and eventually to the Georgia Court of Appeals.

Fulton County did not consider the plaintiff’s purchase from Freddie Mac to be a bona fide arms-length transaction.  Therefore, the Board argued, that it did not have to honor the $207,000 figure. Because Freddie Mac is a government entity, the Board argued, it cannot act in its own best interest and therefore cannot meet the statutory definition of an arm’s length transaction, that requires “both parties to the transaction be acting in their own best interests.”

As a practice Fulton County disregarded the values of all sales involving government entities.  The Court noted that not only is the statute devoid of any language suggesting this policy, but that the Board’s position: “that the best interests of a governmental entity are not and can never be synonymous with the best interests of the public which that entity serves” is “contrary to our fundamental understanding of government.”

Broken down further, the Board basically asserts that a government entity is never buying or selling property at a fair market value. If true, this should be a concern to all citizens.

Thankfully the Court remanded the matter to Superior Court with the instruction to enter judgment in favor of the plaintiff and to consider awarding attorneys’ fees to the plaintiff.

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