SB 382: Ad Valorem Taxation; make the state-wide base year homestead exemption mandatory for all political subdivisions

Georgia currently lets counties, cities, and school districts opt out of the state-wide homestead exemption, which had been based on freezing a home's assessed value in a base year. This bill, titled the "Homeownership Opportunity and Market Equalization Act of 2026," rewrites that exemption (O.C.G.A. § 48-5-44.2) so it applies to every homestead statewide starting in 2027, phasing in as a flat percentage discount on a home's value: 10 percent in 2027, rising to 50 percent by 2031. School districts would no longer be able to apply the exemption, but the state's school funding formula would be adjusted to account for the lost local revenue. The bill also caps local sales tax rates at 2 percent through 2026 and 5 percent after, adds new reporting requirements for sales tax collections, changes how a local sales tax for property tax relief (FLOST) can be adopted (by resolution instead of referendum), and requires voter approval before local governments or school boards can raise property tax revenue by more than 3 percent or the inflation rate, whichever is greater. It also calls for a nonbinding statewide referendum in November 2026 on broader property tax relief and directs future tech-sector sales tax revenue toward homestead tax relief grants. The law would take effect once the Governor signs it.

• Converts the state-wide homestead exemption from a frozen 'base year' value into a phased-in percentage discount on a home's assessed value, reaching 50 percent by 2031.
• Makes the state-wide homestead exemption mandatory for every county, city, and consolidated government, eliminating the prior local opt-out option.
• Removes local school districts from the definition of governments subject to the homestead exemption, while adjusting the state school funding formula to offset the lost local tax revenue.
• 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 in a year.
• Changes how the special local sales tax for property tax relief (FLOST) is put in place, from a public referendum to adoption by resolution or intergovernmental agreement.
• Raises the overall cap on combined local sales taxes from 2 percent to 5 percent starting January 1, 2027, and adds new sales tax reporting requirements broken out by city and county.

Homeowners statewide who receive the new mandatory exemption, county and city governments and consolidated governments that must apply it, local school boards facing new revenue caps and referendum requirements, county tax commissioners handling exemption applications, and retailers who must file more detailed sales tax location and industry data.

Homeowners across Georgia would see a growing property tax discount phased in through 2031 instead of a patchwork of local exemptions, while local governments and school boards would lose some ability to raise property tax revenue quickly without voter sign-off, potentially reshaping how they fund schools, roads, and services.

• Section 2-1 raises the combined local sales tax cap from 2 percent to 5 percent beginning January 1, 2027, with new exceptions listed.
• Section 2-2 requires sales tax returns filed after January 1, 2027 to break out collections by city, county, and industry code, and requires the state to publish this data annually.
• Section 3-1 through 3-5 change the special local option sales tax for property tax relief (FLOST) so it can be imposed by a government resolution instead of a voter referendum, and ties its use directly to offsetting the new homestead exemption's revenue loss.
• Section 4-1 rewrites the state-wide homestead exemption (O.C.G.A. § 48-5-44.2) into a mandatory, phased-in percentage reduction of home value: 10 percent in 2027 rising to 50 percent in 2031 and beyond, and removes local school districts from its coverage.
• Section 5-1 adjusts the school funding formula (the equalized adjusted school property tax digest) to exclude the value lost to the new homestead exemption when calculating state equalization grants.
• Sections 5-2 through 5-4 require a local referendum or special state law before a school board or local government can adopt a budget that raises property tax revenue by more than 3 percent or the inflation rate.
• Section 6-1 expands taxpayer notice requirements before a local government raises its millage rate above the roll-back rate and requires refunds to taxpayers if a government fails to follow these procedures.
• Part VII calls for a nonbinding statewide referendum on the November 2026 ballot asking whether the General Assembly should let Georgians decide on new finance procedures for full homeowner property tax relief.

1. 2026-03-27House Committee Favorably Reported By Substitute (House)
2. 2026-03-25House Withdrawn, Recommitted (House)
3. 2026-03-20House Committee Favorably Reported By Substitute (House)
4. 2026-02-05House Second Readers (House)
5. 2026-02-04House First Readers (House)
6. 2026-02-03Senate Passed/Adopted By Substitute (Senate)
7. 2026-02-03Senate Third Read (Senate)
8. 2026-02-03Senate Engrossed (Senate)

• Chuck Hufstetler (R, SD-052)Primary sponsor
• John Albers (R, SD-056)
• Larry Walker (R, SD-020)
• Jason Anavitarte (R, SD-031)
• Bo Hatchett (R, SD-050)
• Randy Robertson (R, SD-029)
• Shawn Still (R, SD-048)
• Clint Dixon (R, SD-045)
• Carden Summers (R, SD-013)
• Billy Hickman (R, SD-004)
• Ben Watson (R, SD-001)
• Kay Kirkpatrick (R, SD-032)
• Jason T. Dickerson (R, SD-021)
• Mike Hodges (R, SD-003)
• Chuck Payne (R, SD-054)
• Drew Echols (R, SD-049)
• Brian Strickland (R, SD-042)
• Ricky Williams (R, SD-025)
• Sam Watson (R, SD-011)
• Matt Brass (R, SD-006)
• Lee Anderson (R, SD-024)
• Marty Harbin (R, SD-016)
• Greg Dolezal (R, SD-027)
• Steve Gooch (R, SD-051)
• Blake Tillery (R, SD-019)
• Shaw Blackmon (R, HD-146)

1. PassedSenate voteFebruary 3, 2026

   31 yea, 22 nay (0 not voting, 1 absent)

   Motion To Engross: Senate Vote #511

2. PassedSenate voteFebruary 3, 2026

   31 yea, 19 nay (3 not voting, 1 absent)

   Passage By Substitute: Senate Vote #513

3. PassedSenate voteFebruary 3, 2026

   30 yea, 20 nay (3 not voting, 1 absent)

   Motion To Immediately Transmit: Senate Vote #514

• property taxes
• homestead exemption
• local sales tax
• school funding
• property tax referendum