Villa Rica holds second public hearing on Georgia’s HB 581 floating homestead exemption and possible local sales tax offset

Villa Rica City Council held the second of three public hearings on House Bill 581, the statewide floating homestead exemption, explaining how the law could limit annual taxable-value increases for homeowners and outlining a possible local sales-tax option to offset lost property-tax revenue.

The hearing matters because HB 581, passed by the Georgia General Assembly and approved statewide by referendum in November 2024, takes effect Jan. 1, 2025; local governments must complete any decision to opt out of the statewide exemption by March 1, 2025, and must hold three advertised public hearings before adopting an opt-out resolution.

City staff explained that HB 581 sets a floating homestead exemption so a homestead’s taxable value may rise only at a rate of inflation (the state revenue commissioner will set the figure; the presentation used the Consumer Price Index as an example). The law applies to maintenance-and-operations (M&O) property tax and to special service districts but does not apply to bond millage. For homeowners already receiving a homestead exemption, the ordinance grants the more favorable exemption — the existing local exemption or the new floating exemption, whichever benefits the taxpayer.

Because the exemption could reduce property-tax revenue for local governments, HB 581 also authorizes a floating local option sales tax (often called a FLOSS) of up to 1%—but only if every county and all cities within that county that levy property tax have the floating homestead exemption in effect. That sales tax would require a separate voter referendum, may run for up to five years per approval, and would require a new referendum to continue beyond five years. The presentation noted school boards are not eligible to share in FLOSS proceeds without a constitutional amendment.

City staff emphasized procedural deadlines and advertising requirements in the statute: a local government that wishes to opt out must complete the opt-out process by March 1, 2025, hold three public hearings (one between 6 p.m. and 7 p.m.), publish notices at least one week before each hearing using specified display size and placement rules, and file any opt-out resolution with the Georgia secretary of state.

Several residents spoke during the three-minute public-comment period. Christy Chastain of 239 Berkeley Drive urged the council to "remain opted in," saying Villa Rica homeowners have experienced property-value increases that far outpaced inflation in recent years and that remaining opted in would help maintain a more normal growth pattern for local taxes. Peg Taylor of 2120 Osprey Cove said she was "a bit confused" but concluded, "why would anybody wanna opt out of that?" David Donis of 2566 Great Loop asked how a resident qualifies for a homestead exemption and requested a plain-language explanation; staff said they would be available after the hearing to answer questions.

Council members and staff discussed practical complications for Villa Rica because the city lies in two counties. Staff explained that if one county or a city within a county opts out of the statewide floating homestead exemption, the FLOSS option would be unavailable to jurisdictions spanning that county. Several speakers cautioned that large retail sales in one county (for example, grocery or big-box stores located in Carroll County) could subject Douglas County residents to a FLOSS without providing that county the intended revenue replacement, depending on which jurisdictions opt in or out.

No resolution to opt out or to opt in was adopted at the meeting; the council did not take formal action on HB 581 during the session. The city confirmed this meeting was the second of three required public hearings; the third hearing is scheduled for next Tuesday at 6 p.m., after which the council may vote on an opt-out resolution if it chooses.

The council adjourned following the public-comment period.