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Answers provided to “Frequently Asked Questions” are provided as a general guide and are intended solely as a convenience to interested parties. Answers may vary from state to state and you are urged to consult with professional advisors (such as accountants and/or attorneys) who can best provide answers to your specific questions and unique circumstances. Most of the following questions and answers are specifically related to Georgia.
The property tax process is a complicated system that involves many steps. In Georgia, property taxes are calculated using the following formula:
40% of the Property Value * Millage Rate = Tax Owed
First the County Commissioners set the Millage Rate. A Mil is like a percent, except it is 1/1000 rather than 1/100. Tax rates are expressed in Mils because it is more convenient to say ‘fifteen mils’ instead of ‘one-point-five percent’.
The Board of Assessors is responsible for determining the value of all of the property in the county. However, every citizen has the right to dispute the value set by the Board of Assessors. This appeal must be made to the Board of Assessors and not the Tax Commissioner and must be made before June 1 of each year.
The Tax Commissioner takes the information from the Board of Assessors and the County Commission and calculates the tax owed for each piece of property. The Tax Commissioner is responsible for mailing bills and collecting payments. The Tax Commissioner is not responsible for the increase in taxes from one year to the next, nor is he responsible for increases in property values.
Public policy has created many adjustments to the basic tax calculation described above. For example, to promote individual home ownership, a fixed reduction in the valuation of the property has been granted on residential property when the owner lives in the house. Similar exemptions are granted for senior citizens, veterans, and the disabled. In some cases, additional tax adjustments may be granted to certain areas to promote development. These exemptions and adjustments can be set by all levels of government resulting in a tax bill that can be very complicated.
If you are not receiving tax information from the county (either assessment notices or tax bills), it is your responsibility to notify the appropriate office to correct the problem. As every tax commissioner in the State of Georgia will tell you, not receiving a tax bill does not mean you do not have to pay taxes. Georgia law assumes (and the courts have confirmed this assumption) that a property owner should know when taxes are due and therefore attempt to make a payment even without receiving a tax bill.
Local property taxes are very similar to the way the IRS handles federal income tax. If a person does not file a tax return (and does not pay any taxes) the IRS will add large penalties and file a lien. The IRS mails out tax forms and instruction booklets at the beginning of each year, but it is doubtful that anybody has ever successfully used the excuse that they did not receive a 1040 form in the mail to avoid paying late penalties.
Every person owning property in the State of Georgia is also responsible for filing a return with the Board of Assessors each year. However, unlike the IRS, Georgia law provides that if a real-estate return is not filed, the Board of Assessors will determine the value of the property for tax purposes. (Filing a return with a value different from what the Board of Assessors assigns is considered an appeal of the property’s value and will result in a revaluation of the property and then a formal hearing to set the property’s value.) When no tax return is filed, the law also considers this an acceptance by the property owner that the information maintained in the tax records is correct.
Whenever real property (i.e. land and houses) is transferred in the State of Georgia, the buyer and seller complete a PT-61 Form (Real-Estate Transfer Tax Declaration) and give it to the Clerk of Superior Court when the deed is filed. The PT-61 form provides the information to the county that is used to send out tax bills. However, the information from a PT-61 form will not go into effect until the year after the form is filed.
This form asks for the following information: 1) the seller’s name and address, 2) the buyer’s name and address, 3) some brief information about the parcel (including its identification number in the tax records of the county), and 4) a statement of the transfer tax due from the sale. A copy of this form is sent to the Board of Assessors and Tax Commissioner who then enter the information into the county’s records.
The closing attorney generally completes the PT-61 form during a real estate transaction.
There is no single method to account for taxes at a real estate closing. However, it is rare for the seller to be 100% responsible for the property taxes (unless the closing occurs very late in the year and the seller has already paid the taxes). Usually, the buyer will receive a credit from the seller for a portion of the tax bill and then when the tax bill comes due in the fall the amount will be paid completely by the buyer. In some cases the closing attorney will hold the funds and be responsible for paying the tax bill. However, regardless of the methodology used at a particular closing the tax commissioner will proceed to collect taxes by sending a tax bill (which will have the seller’s name on it) and eventually file a lien if no payment is made. The lien is filed against the property (which is now owned by the buyer) and therefore becomes the buyer’s responsibility.
In the end, after buying real estate, the buyer must be diligent in following up with the Tax Commissioner’s office to be sure that taxes are paid for the year in which the property was purchased.
In Georgia, ad valorem taxes on real property are due annually generally between July 15th and December 15th. If left unpaid, these taxes begin to accrue interest at the rate of 1% per month; additionally a 10% penalty is added to taxes which are 90 days delinquent. In order to collect delinquent taxes, penalties, and interest, the County Tax Commissioner will follow certain statutory procedures to issue a Writ of Fieri Facias (tax lien) against the taxpayer and the underlying real property. The tax lien is a legal writ or order to the Sheriff to seize or “levy” upon the subject property and sell it in order to satisfy the amount due on the tax lien.
If after issuing a Fifa the County Tax Commissioner is still unable to obtain payment of the delinquent property tax, the Tax Commissioner must either (i) proceed to foreclose upon and sell the property in order to satisfy the amount due for unpaid taxes, or (ii) sell the Fifa to a third party such as InVesta and thereby collect the tax money due to the County. Most Tax Commissioners prefer to sell Fifas rather than initiate foreclosure and sell the taxpayer’s property. Since 1998 InVesta Services has purchased in excess of $475 million in Fifas from Tax Commissioners throughout the State allowing Counties to continue to fund government services without having to foreclose on and sell the properties of constituents unable to pay their taxes.
No, not unless you ignore attempts to collect this debt for over a year, do not request a payment plan, and do not contact us before a sheriff’s sale. As a general rule, InVesta does not exercise its right to direct the Sheriff to levy on the underlying property until twelve months or more have passed after your tax lien is transferred to InVesta Services.
The interest rate and your charges to pay off your tax lien to us is the same as those that you would pay to the County Tax Commissioner. The interest rate is 1% per month, far less than the rates charged by many credit card companies. It is also much lower than those charged by consumer loan companies. InVesta Services conforms to rates that are set for such tax debts by the laws of the State of Georgia and other states InVesta does business with.
No, you also owe whatever other fees were previously charged by the tax commissioner’s office plus fees they would normally charge if they retained the lien. This includes a ten percent penalty on the amount of your unpaid taxes, charged 90 days after they become delinquent, along with fees mandated by state law including filing fees for the tax lien, recording fees, transfer fees, advertising fees (if your tax lien goes to a levy) and other fees depending on where and how your lien was transferred. All of these fees are listed on the payoff statement.
why does InVesta Services have my tax lien?
Ask your County Tax Commissioner. InVesta Services purchases only those tax liens that the Tax Commissioner has filed on the County’s General Execution Docket. If you believe that your taxes were paid prior to the FiFa being transferred, contact your County Tax Commissioner. If the FiFa was transferred in error, the Tax Commissioner can reverse the transfer. InVesta Services cannot.
The fastest and lowest cost to you would be to FAX a request for a payoff amount to our fax number, 404-949-3851. We will get back to you within 24 hours if you give us a fax number to respond to. Otherwise we will mail you the payoff information. If you do not have access to a fax machine please mail your request to our mail drop at 1266 W. Paces Ferry Rd, Box 517, Atlanta, GA, 30327. We receive over 300 requests for information each day and we can only effectively respond to and properly document requests by giving preference to requests made by fax or mail. We can be reached by phone at 404-949-3850, but due to the massive number of calls we receive each day our phones roll over to an answering machine, which we respond to after all fax and mail requests are answered. You may also come to our offices at 1737-G Ellsworth Industrial Boulevard, Atlanta, Georgia 30318 to get your payoff amount or make your payment in person. We strongly recommend that you submit your requests by fax or mail.
You can make your payment to us by personal check, money order, or cashier’s check, whichever you prefer. We cannot accept cash. As we service portfolios for several different entities we indicate on the payoff request the appropriate party to whom you should make your check payable. We will post your payment to your account, then file the legal papers to cancel the tax lien with the County. The process generally takes 60-90 days. Once again due to the volume of payments we process each day we strongly suggest that you mail your check to our mail drop at 1266 West Paces Ferry Road Box 517, Atlanta, GA 30327. The US Post Office states that mail within the metro area is delivered in 24-48 hours. When we receive and process your payment we will mail you a receipt for the same. If you have not gotten a receipt back from us within 10 days of mailing your payment please fax or mail us a request to research the matter.
Is there any way I can work out a payment plan?
We will work with taxpayers unable to pay the full balance. Please write or fax our office to ask for such arrangements. Absent special circumstances, we suggest arrangements that allow you to pay off the tax lien over a period of 12 months. Please note that interest charges continue to accumulate while your account remains unpaid, so the lowest cost alternative for you would be to pay the debt immediately if possible.
What should I do about it?
Send the mortgage company a copy of our payoff statement. It contains your tax parcel ID from the tax commissioner, so your mortgage company can check their payment records. Note your mortgage ID number (find it on your payment stubs) and request that they pay off the tax lien. If the non-payment is their error, they will generally not charge you. They may pay us directly if they so choose.
Is my mortgage company going to call in or accelerate my loan?
Generally not, especially if you pay the tax lien off or show them that it will be paid off soon. However, it is better for you to tell them about the problem and how you plan to solve it, than to have them discover it, if the tax lien remains unpaid and we are forced to send the property to a sheriff’s sale. If they choose, the mortgage company can pay the amount of the tax lien, set up an escrow account for you, and let you pay them each month, adding the payment to your mortgage payment.
We do not. However, a tax lien represents a lien on your property that is superior to the lien held by your mortgage company. For this reason many mortgage companies contact us directly.
The Tax Commissioner’s duties are to bill and collect taxes. It is the Clerk of Superior Court who maintains a record of all of the liens that are filed in the county. (This record of liens is called the General Execution Docket.) As part of the collection process, the Tax Commissioner may issue a tax lien (the legal term for a lien in Georgia is ‘Writ of Fieri Facias’ which is usually just abbreviated as ‘FiFa’) that is then filed with the Clerk of Superior Court. As another part of the collection process, the Tax Commissioner may accept payment from a third party such as InVesta Services and transfer the County’s interest in that lien to the third party. When this happens a document will be filed with the Clerk of Superior court saying that the previously filed tax lien is now owned by the third party. At this point, the Tax Commissioner has fulfilled his or her duty by collecting the amount owed on the taxes for the county or city. The Tax Commissioner’s records will indicate that the lien was transferred after the county received payment in full (from the third- party transferee) and nothing else. Further information about the lien (including its release after payment has been made to the third party transferee) is filed with the Clerk of Superior Court on the General Execution Docket and not the Tax Commissioner’s office.
In many cases, the statement that a lien has not been cancelled will be made after a person searches an index for a document from InVesta Services granting the lien back to the owner of the property. When no such document is found in the index, the person assumes that the lien has not been cancelled. The correct way to research the status of a lien is to find where it was originally filed and look for a cross-reference to the cancellation document filed by the lien holder. Whenever possible, InVesta Services will supply the filing information (the book and page) for locating the cancellation information directly. The fact that the Clerk of Superior Court does not have this document indexed like a normal property deed does not in any way affect the fact that the lien has been cancelled.
When property is sold a deed is recorded showing that Person A sold the property to Person B. In order for Person A to get the property back, a deed must be recorded showing that Person B sold the property back to Person A. Tax liens do not operate this way. When a tax lien is paid in full, the holder of the lien does not give it back to the person who owed the taxes in the first place; instead, the lien holder directs the Clerk of Superior Court to mark the lien as cancelled. This involves the lien holder filing a cancellation document stating that the lien has been paid. The Clerk then physically marks the original document in the record room as paid and includes a reference to where the lien holder’s cancellation document is filed.
InVesta Services does not provide information to any credit reporting agency. However, the lien that is filed by the Tax Commissioner is public record. Credit reporting agencies may be including information from the General Execution Docket in their reports. InVesta Services has no control over this. When a lien is paid, InVesta Services will file a cancellation with the Clerk of Superior Court in the appropriate County for filing on the General Execution Docket. If credit reporting agencies are in fact examining the General Execution Docket correctly, they will find the cancellation. As InVesta Services does not have a relationship with any of the credit reporting agencies, we cannot instruct them to remove information from their reports. However, as mentioned above, we will provide cancellation information whenever possible to property owners as evidence that the liens have been satisfied.
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