County presenter says Walton County's homestead freeze limits board's ability to lower property tax rate

A county staff member told the Walton County Board of Commissioners on July 2 that the county's homestead freeze, adopted in February 2003, freezes a home's assessed value at the purchase date for as long as the owner occupies the property, and that practice now covers 23,386 homes in the county.

The presenter said the freeze applies only to Walton County's taxing authority and does not affect the county's school system or cities. He told commissioners that because frozen values do not rise with market assessments, the county cannot rely on new assessment growth in the same way the school system can when it reduces its millage rate.

Why it matters: The presenter used several figures to illustrate the effect. He said one mill for Walton County this year yields about $5,017,000, while one mill for Walton County's school system yields about $4,838,000. He also said the digest is roughly 71% residential, 19.55% commercial and industry, and 9.45% raw land, and that residential homestead freezes have kept many long-term owners taxed on values far below current market value.

The presenter gave specific examples from the county's handout: a house that had an assessed value of about $132,100 in 2017 and a current market value the presenter cited as about $579,000 is still being taxed on roughly $130,200 because its assessed value was frozen at purchase. He said another house frozen at $42,025 is now worth about $279,000 in the presenter's figures but remains taxed on the lower frozen amount.

The presenter also contrasted the county's millage history with recent actions: he said the county's mill rate peaked in 2012 at 12.41 mills and that the board has lowered Walton County's mill rate since 2014 to roughly 10.41 mills; he noted that without the homestead freeze the county's mill rate "most likely" would be closer to 7 percent, according to his presentation.

Discussion points raised by commissioners and staff included: that the homestead freeze is a significant benefit to many longstanding homeowners yet a constraint on the county's revenue flexibility; that commercial property values (examples given included banks and national retail sites) have not increased in aggregate for certain individual parcels the presenter cited; and that rental properties are not protected by the freeze and have been among the fastest-rising assessments.

The presenter said Walton County receives many inquiries about apparent tax increases and offered an example of a city resident whose total county tax decreased slightly while city taxes rose, producing the impression of a large overall increase. He closed by saying the county had lowered the mill rate over the last nine years but that the homestead freeze is "catching up with you."