Georgia – In recent years, since the start of the pandemic, American homebuyers have experienced a lot of struggles when they decided to buy their own home. Due to the work-from-home policy that became standard for most companies for an extended period of time, the demand for housing and rent skyrocketed, resulting in sky-high house prices, a trend that lasted for more than two years.
Inflation fueled house prices; rate hikes made it worse
This trend was further fueled by growing inflation. And it was not only people who were looking to buy a home for themselves but also businesses and corporate investment firms that were buying properties like crazy so they could later rent to people who switched to working from home. All in all, the pandemic disrupted the housing market in what appears to be a generational switch and adjustment.
The real problems appeared when the Federal Reserve started to increase rates, meaning that loans were becoming more expensive with each rate hike. That heavily impacted house sales, but home prices, combined with the new rates, became even more expensive.
House prices and rate hikes in Georgia followed the nationwide trend
Like many places in the country, people in Georgia are facing similar issues due to market changes. However, there’s hope that things might improve. Some lawmakers in Georgia are planning to make changes to the state’s constitution. Their goal is to keep property taxes from increasing too much, which could help reduce the cost of buying homes. They want to set a limit on property tax increases, especially when the value of properties goes up.
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11 Alive talked to Anne Choi who lives in the area. She mentioned that the house prices and property taxes have been steadily increasing over the past year, and she expects this trend to continue into this year. According to public records, her two-bedroom house has increased in value by 25% over the past decade. As her home’s value goes up, so do her property taxes.
Georgia to limit automatic property tax hikes based solely on rising values
Property taxes in homes can increase for two reasons: either the government decides to raise the tax rates, or the value of the property itself goes up. There’s a new plan being discussed by state lawmakers that aims to control these increases. The idea is to limit tax hikes that happen just because a property’s value increases.
Republican State Senator Chuck Hufstetler talked about this issue. He mentioned that there are cases where people saw their property taxes go up by 40% without any decrease in the tax rate. His bill, SB 349, wants to set a 3% cap on tax increases that are solely due to higher property values. Hufstetler believes this would be especially beneficial for older community members who want to stay in their homes but are struggling with high taxes.
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Anne Choi, a local resident, isn’t completely convinced about the bill but acknowledges it could be beneficial. She thinks it would help her and many of her neighbors who are getting older and want to stay in their homes.
This bill, which has support from some Democrats, would need a change in the state constitution. If it moves forward, it will be up for a vote by the people of Georgia this fall.