HB942: HB942 Ad valorem tax; public property owned by a political subdivision outside of its territorial limits; limit an exemption

Under current Georgia law, when a city or county owns land outside its own borders, that land can still be fully exempt from property tax if at least 25 percent of it has been graded or improved and it is actively used for a public or governmental purpose. This bill changes that rule so the exemption is no longer complete. Starting January 1, 2027, property that qualifies for this exemption under the 25-percent-improved standard would only be exempt from 60 percent of its fair market value, meaning the remaining 40 percent of the property's value could be taxed. The other existing exemption categories in the law, covering smaller tracts of 300 acres or less, property inside a county that includes the owning municipality, and designated watershed land, are not changed by this bill.

• Amends Georgia's property tax exemption law (O.C.G.A. § 48-5-41) to limit, rather than eliminate, the exemption for certain publicly owned land located outside a political subdivision's own borders.
• Caps the exemption at 60 percent of fair market value, starting January 1, 2027, for property that is at least 25 percent graded or improved and actively used for public or governmental purposes.
• Leaves untouched the other exemption categories: land of 300 acres or less, land inside a county that includes the owning municipality, and designated watershed land.
• Repeals any existing laws that conflict with this change.

Cities, counties, and other political subdivisions in Georgia that own land or buildings outside their own territorial limits, especially land they have developed for public use; also affects the local tax digests and revenue of the counties where that outside-owned property sits.

Local governments that own improved property outside their own borders, such as a city-owned facility in a neighboring county, would see 40 percent of that property's value become taxable starting in 2027, which could raise costs for the owning government or new revenue for the county where the property sits.

• Section 1 revises subparagraph (a)(1)(B) of O.C.G.A. § 48-5-41, the section governing tax exemptions for public property located outside a political subdivision's own limits.
• The 25-percent-improvement and active-public-use test for exemption eligibility remains in place, but the exemption tied to it becomes partial rather than full.
• Beginning January 1, 2027, qualifying property is entitled to an exemption equal to 60 percent of its fair market value, rather than a full exemption.
• Section 2 repeals any conflicting laws, a standard provision clearing the way for the new rule to apply.

1. 2026-03-04House Postponed (House)
2. 2026-03-03House Postponed (House)
3. 2026-02-26House Postponed (House)
4. 2026-02-25House Postponed (House)
5. 2026-02-24House Committee Favorably Reported (House)
6. 2026-01-14House Second Readers (House)
7. 2026-01-13House First Readers (House)
8. 2026-01-12House Hopper (House)

• Rhonda Burnough (D, HD-077)Primary sponsor
• Eric Bell (D, HD-075)
• Sandra Scott (D, HD-076)

• property taxes
• ad valorem tax
• local government finance
• tax exemptions