HB1116: HB1116 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: a Local Homestead Option Sales Tax (LHOST) of up to 1%, which would fund property tax exemptions on primary residences starting January 1, 2028, if voters approve a local referendum. The tax would offset property taxes for eligible homeowners rather than paying for government services directly. The bill also caps how much local school boards and city or county governments can increase property tax revenue year over year (generally 3% or the inflation rate, whichever is greater) without either a special act of the legislature or voter approval in a referendum. It raises the cap on reserve funds school systems can hold, restricts which dates local governments can hold revenue-increase referendums, requires property owners of income-producing property to supply income data to tax assessors upon request, revises the notice and hearing process for proposed property tax increases, and bars counties from retroactively billing homeowners for back taxes when a homestead exemption was wrongly applied through no fault of the taxpayer. Most provisions take effect when the Governor signs the bill, though several set January 1, 2027 or 2028 start dates.

• Creates a Local Homestead Option Sales Tax (LHOST) of up to 1%, approved by county referendum, to fund homestead exemptions on primary residences beginning January 1, 2028.
• Requires school boards, cities, and counties to get voter approval in a referendum (or a special act of the legislature) before raising property tax revenue by more than 3% or the inflation rate, whichever is greater, starting January 1, 2027.
• Increases the cap on reserve funds local school systems may hold from 15 percent to 25 percent of their budget.
• Restricts the calendar dates on which local governments can hold special elections asking voters to approve revenue increases, including tax increases.
• Requires property owners of income-producing property to supply income and expense data to county tax assessors upon request, to be used confidentially in valuing the property.
• Prohibits counties from retroactively billing a homeowner for back property taxes when a homestead exemption was mistakenly applied through no fault of the taxpayer.

Homeowners who qualify for homestead exemptions, county and municipal governments and their tax offices, local school boards, owners of income-producing rental or commercial property, county tax assessors and commissioners, and voters who may face new referendums on local tax and budget increases.

Homeowners in participating counties could see part of their property tax bill offset by a new sales tax, while school boards and local governments would face a hard limit on raising property tax revenue without asking voters directly, changing how budget decisions and tax increases get made at the local level.

• Section 2-2 creates the LHOST under new Code Section 48-8-109.50 et seq., a 1% county sales tax used to fund homestead exemptions, capped at 10 years but renewable, with revenue distributed through a county trust account to eligible local governments.
• Section 3-2 raises the school system reserve fund cap under O.C.G.A. § 20-2-167 from 15 percent to 25 percent of budget.
• Section 3-3 requires a school board referendum before adopting a budget that raises ad valorem tax revenue beyond 3 percent or the inflation rate, starting January 1, 2027, with specific ballot language requirements.
• Section 3-5 imposes the same 3 percent/inflation revenue cap and referendum requirement on city and county governing authorities adopting budget ordinances.
• Section 4-1 limits the dates local governments can hold special elections on revenue-increase questions to specific dates in odd and even years.
• Section 5-1 requires income-producing property owners to provide income and expense data to county tax assessors upon request, with the data kept confidential.
• Section 5-2 revises the notice and public hearing process a local government must follow before adopting a millage rate that exceeds the roll-back rate, adding a fourth public comment requirement and a taxpayer refund remedy for noncompliance.
• Section 5-4 bars retroactive collection of back taxes from a homeowner when a homestead exemption was mistakenly applied due to no fault of the taxpayer.

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 exemption
• local sales tax
• school funding
• property tax referendums