Savannah, Georgia, Financial Overview

Savannah Real Estate Owners Enjoy Favorable Georgia State Taxes

When considering the tax burden, Georgia is a favorable locale over most states in the nation. The 2006 tax burden of 10.3 percent of income ranks 32nd in the nation for state and local taxes, according to the Tax Foundation. The national average is 11.0 percent.

In Georgia, there is no inheritance tax and only a limited estate tax. Savannah is the county seat of Chatham County. Millage rates for incorporated Chatham County represents 1/10 cent and is at .25 for state, 14.5 for school, 10.8 for county and 1.3 for school bond. Property taxing for homeowners may vary whether or not county, city, school or state taxes apply, according to the Georgia Department of Revenue. School taxes are exempt for homeowners aged 62 and older who earn $10,000 or less. Additionally, $4,000 of their property value is exempt from state and county taxes. Others may qualify for certain state and county property tax exemptions, including those aged 62 and older whose family income does not exceed $30,000.

The City of Savannah states that residents within city limits are required to pay both county and city property taxes per Georgia law. Taxes are billed against the assessed value of the property and/or Savannah real estate, which is 40% of the market value.

Georgia House Representatives Ron Stephens and Burke Day proposed a referendum that became a bill offering certain homeowners who retain ownership and live in the home a floating homestead exemption. The exemption increases as the property assessment increases, so taxes do not increase unless the millage rate increases.

Homestead exemptions are offered by the state of Georgia to those who own and occupy their home as a primary residence. Homeowners receive $2,000 off the assessed value of their property and an additional $10,000 is applied to county millage rates. Disabled veterans may be eligible for an exemption of up to $45,000 of assessed value.

Georgia taxpayers who are 62 years of age or older, or permanently and totally disabled regardless of age, may be eligible for an income adjustment on their tax return, according to the Georgia Department of Revenue. The retirement income exclusion for tax year 2006 was $25,000. As of January 1, 2007, the retirement income exclusion increased to $30,000 and will rise to $35,000 for taxable years beginning on or after January 1, 2008.

In the state of Georgia, a retirement exclusion is allowed provided the taxpayer is 62 years of age or older, or the taxpayer is totally and permanently disabled. Retirement income includes items such as: interest, dividends, net rentals, capital gains, royalties, pensions, annuities, and the first $4000.00 of earned income. Earned income is income from a trade or business, wages, salaries, tips, or other compensation.

With Hunter Army Air Field situated on the south side of the city and Fort Stewart in neighboring Liberty County, Savannah and Chatham County is home to many active and retired military personnel. Information from airforcetimes.com regarding retired military pay states, “Beginning in tax year 2003, National Guard and reserve combat pay is not taxed and exit bonuses / separation pay follows federal tax rules. Retired pay and survivor benefits are exempt up to $25,000 for people 62 and older or for those totally disabled. This amount doubles for married couples filing joint returns and both receiving retirement income.”

There is no federal income tax deduction for Georgia taxes paid. There are also no additional medical and dental insurance deductions than what is allowed on federal taxes.

Georgia’s personal income tax rate range varies from a low of 1.0% to a high of 6%. Sales tax in the state of Georgia is at 4% for food, with prescription drugs being exempt. Gasoline tax is at 13.4 cents per gallon with diesel fuel at 15.4 cents per gallon. Cigarette tax in Georgia is set at 37 cents per pack of twenty. Georgia offers two tax-free holidays held in April and August of each year that assists teachers, parents and students in the purchase of school supplies, computers, computer accessories and clothing. The tax holidays were combined in 2006 and held in the month of August.

Homeowners insurance in Chatham County often involves a flood policy, as much of the county and the Savannah area lies in a flood zone. The Chatham Emergency Management Agency states that Chatham County subscribes to the Community Rating System (C.R.S.). By doing so, 15,877 flood insurance policy holders have received a 5% discount on their policy cost. Residents and Savannah real estate owners saved a total of $257,400 each year on flood insurance premiums. //