By Kirsten Ricci
Perhaps you’ve heard that our tax laws have changed. For most Americans, we will end up paying less, despite what you’ve heard, but there is a potentially big caveat with regard to property taxes. This was a contentious issue for lawmakers but in the end it means some of our wealthier neighborhoods will see changes.
For those of you who reside in homes over 600K, the new tax laws coming into play for 2018 may have a big impact on your bottom line as there is now a $10,000 cap on the combined itemized deduction for state and local property taxes. Generally, this means that those of you in homes under 600K need not worry about the deduction, but the more north you are of that number, the amount could be significant.
This is a bigger issue in the North Metro Atlanta suburbs, as two of the three wealthiest zip codes in the state are here. According to ESRI Wealth Rank, the wealthiest zip codes in Georgia are 30327 (Sandy Springs), 30068 (East Cobb) and 30075 (Roswell). This tax increase has led some to try and pay their bills early in an effort to avoid the 2018 bill, but that is a failed tactic. In Georgia, tax commissioners cannot accept 2018 payments before they set their tax rate, which then needs approval. There are numerous examples of some tax professionals advising their clients to pay early though this is misguided advice.
The City of Roswell has had over 100 requests to pay bills early and in Cobb County the number is similar. To be clear, those entities have their hands tied as they could be punished for acceptance of early payment.
All of this plays out in the backdrop of property assessments, which you’ll remember was a big issue last year with the state having to enact legislation to revert back to recession levels of home pricing. Many homes in this area have increased drastically since 2010 yet the assessments do not reflect those changes. Should that issue arise again it may have a double-edged effect of increased federal and local taxes.
Beyond the tax increase, I expect 2018 to be a good year for local homeowners with prices moving up in a still competitive market that right now is dominated by low inventory. In our area homes under $500K have less than two months of inventory, while homes above that have closer to seven months of supply. Generally, six months is considered a balanced market.
In 2017, 92% of home sales in our area were under $500K, which means that only 8% of buyers are targeting homes in the upper price point. For example, in Roswell there are only 98 homes for sale between $550K to $1 million, while in Alpharetta that number is 142, and East Cobb comes in with 120. The bottom line is the good old-fashioned economics of supply and demand—with this being a high demand area. The spring market, the peak-buying season, is expected early this year likely as early as Feb. 1.
Kirsten Ricci is a Roswell resident and a Berkshire Hathaway Agent who specializes in residential real estate in the north metro Atlanta area. She can be reached at