HB 1116: Homeownership Opportunity and Market Equalization Act of 2026; enact

This bill, titled the Homeownership Opportunity and Market Equalization Act of 2026, creates a new option for counties, cities, and consolidated governments in Georgia: with voter approval in a local referendum, they could impose a 1 percent Local Homestead Option Sales Tax (LHOST) starting January 1, 2028. The money raised would be used to reduce or eliminate property taxes on homestead properties (primary residences) within that jurisdiction, on top of existing homestead exemptions. The tax could last up to ten years and be renewed by another vote. The bill also limits how much local governments and local school boards can increase property tax revenue each year without going to voters: increases beyond 3 percent or the inflation rate (whichever is greater) generally require either a special local law from the legislature or approval in a referendum. It restricts the dates on which local governments can hold special elections about tax or revenue increases, requires property owners to supply income data to tax assessors on request for income-producing property, updates rules for advertising property tax increases, and bars counties from retroactively billing homeowners for past mistakes involving improperly applied homestead exemptions when the taxpayer was not at fault. The bill would take effect when signed by the Governor.

• Creates a new Local Homestead Option Sales Tax (LHOST) that counties, cities, and consolidated governments can adopt by referendum, at a rate of 1 percent, to fund homestead property tax exemptions starting January 1, 2028.
• Requires voter approval (or a special state law) before a local school board or local government can raise property tax revenue by more than 3 percent or the inflation rate, whichever is greater, in a single year.
• Restricts special elections about local tax or revenue increases to specific dates tied to general primaries and November elections.
• Requires owners of income-producing property to supply actual income and expense data to county tax assessors when requested, to be kept confidential.
• Bars tax officials from retroactively billing a taxpayer for back property taxes caused by a mistakenly applied homestead exemption that was not the taxpayer's fault.
• Excludes certain homestead exemption amounts from the school funding formula used to calculate state equalization grants, and raises the share of local school funds that can go toward direct instructional costs from 15 percent to 25 percent.

Homeowners eligible for homestead exemptions, county and city governments and consolidated governments considering the new sales tax, county tax commissioners and assessors, local school boards, owners of income-producing rental or commercial property, and voters who would decide referendums on the new sales tax and on property tax increases above the 3 percent cap.

Homeowners in adopting counties could see lower property tax bills funded by a broader sales tax paid by everyone who shops there, shifting some tax burden from homeowners to consumers generally. At the same time, school boards and local governments would face new voter-approval hurdles before raising property tax collections significantly, and property owners with rental or commercial buildings would face new disclosure requirements to tax assessors.

• Section 2-2 creates new Code Sections 48-8-109.50 through 48-8-109.63 establishing the LHOST, defining eligible local governments, homestead property, and how proceeds are collected, held in trust, and distributed to reduce property taxes.
• Section 2-1 caps the combined rate of certain local sales taxes, including the new LHOST, at up to 1 percent in aggregate under O.C.G.A. § 48-8-6.
• Section 3-1 excludes the value of homestead exemptions under O.C.G.A. § 48-5-44.2 and certain local constitutional amendment exemptions from the school property tax digest used to calculate state equalization grants.
• Section 3-3 requires, starting January 1, 2027, that a local school board hold a referendum before adopting a budget that raises property tax revenue more than 3 percent or the inflation rate above the roll-back rate.
• Section 3-4 and 3-5 impose the same 3 percent/inflation cap and referendum requirement on other local governments' budget amendments and budget ordinances, effective January 1, 2027.
• Section 4-1 limits special elections on local revenue-increase questions to the general primary date or the Tuesday after the first Monday in November.
• Section 5-1 requires property owners to supply actual income and expense data to county tax assessors upon request for valuing income-producing property, and keeps that data confidential.
• Section 5-4 prohibits tax officials from retroactively assessing a taxpayer for back taxes caused by a mistakenly applied homestead exemption that was not the taxpayer's fault.

1. 2026-04-02House Agreed Senate Amend or Sub As Amended (House)
2. 2026-03-31Senate Passed/Adopted By Substitute (Senate)
3. 2026-03-31Senate Third Read (Senate)
4. 2026-03-31Senate Engrossed (Senate)
5. 2026-03-27Senate Read Second Time (Senate)
6. 2026-03-27Senate Committee Favorably Reported By Substitute (Senate)
7. 2026-03-09Senate Read and Referred (Senate)
8. 2026-03-06House Passed/Adopted By Substitute (House)

• Shaw Blackmon (R, HD-146)Primary sponsor
• Jon Burns (R, HD-159)
• Chuck Efstration (R, HD-104)
• James Hatchett (R, HD-155)
• Charles Cannon (R, HD-172)
• Charles Martin (R, HD-049)
• Chuck Hufstetler (R, SD-052)

1. PassedHouse voteMarch 6, 2026

   98 yea, 68 nay (3 not voting, 8 absent)

   Passage: House Vote #677

2. PassedSenate voteMarch 31, 2026

   33 yea, 15 nay (2 not voting, 4 absent)

   Motion To Engross: Hb 52, Hb 248, Hb 963, Hb 964, Hb 1001, Hb 1077, Hb 1116, Hb 1129, Hb 1132, Hb 1209: Senate Vote #876

3. PassedSenate voteMarch 31, 2026

   31 yea, 19 nay (0 not voting, 4 absent)

   Passage By Substitute: Senate Vote #881

4. PassedHouse voteApril 2, 2026

   102 yea, 73 nay (1 not voting, 0 absent)

   Agree To Senate Sub As Am: House Vote #848

5. FailedSenate voteApril 2, 2026

   24 yea, 28 nay (0 not voting, 2 absent)

   Agree To House Amendment To Senate Substitute: Senate Vote #974

• property taxes
• homestead exemptions
• local sales tax
• school funding
• local government budgets