When GDOT (or another condemning authority) takes your land, they owe you just compensation. You may wonder if the condemning authority pays you this compensation based on the tax value of your property.

The short answer is: no, they do not. The slightly longer answer is: no, they do not, nor do you want them to.

The U.S. Constitution guarantees that those whose property the government takes must receive “just compensation” in exchange. Georgia amended its constitution to take it a step further, providing that “private property shall not be taken or damaged for public purposes without just and adequate compensation being first paid.” State law is now more stringent about what can be taken and what must be paid.

The idea of just compensation is that it’s an amount that ideally makes the property owner “whole” again, in the sense that it replaces the value of the land that was taken as well as the value lost from any remaining property.

What just compensation means in your individual situation is rarely straightforward. To see what your property may really be worth, call 1-888-391-1339 today for your free case evaluation.

Calculating just compensation is based on many factors unique to your land, but the tax value of your property is not one of them.

Here are three reasons why:

#1: The tax value of your land is irrelevant for eminent domain purposes

GDOT hires their own appraisers to determine the value of your property before sending you an offer, and while they may use the same basic valuation approaches that a tax assessor does (sales comparison, income, and cost), they can arrive at very different figures for a variety of reasons.

GDOT uses this appraisal to interpret what the fair market value is for your property according to the strict requirements of Georgia law. Fair market value and just compensation for your property are not based on the land’s tax value.

If they’re not planning to take all your property, the condemning authority will determine the value before the taking, and then what they expect your property value to be after the project is completed. In simple terms, the difference between these two values is what they generally consider “just compensation.”

Assessed value vs. fair market value

In Georgia, all property is generally taxed at an assessment rate of 40% of its fair market value. In other words, assessed value depends on market value. You pay property taxes according to that assessment, and the state applies the millage to your property. Millage can vary.

Here’s what truly matters to an eminent domain appraisal:

Just compensation is based on your land's fair market value, not its tax value.

How is fair market value for your property determined?

How do you know the fair market value of your land? That’s what matters: what would your property reasonably sell for on the open market? If you recently bought your property, you likely have a good idea of its worth, and it may be obvious that the government’s offer is too low. But if you’ve owned your property for many years, you may not know how much it is worth now.

GDOT uses an eminent domain appraisal to determine the value of your property, but while the methods (sales comparison, income, and cost) are the same as what a tax assessor may use, the results can and do differ for various reasons. An eminent domain appraisal, for example, should take into account the highest and best use for the property – even if that is not its current use (see reason #3).

Tax value is irrelevant to your property’s value in an eminent domain taking. To determine what your property may really be worth, get a free case evaluation from our knowledgeable attorneys.

#2: Tax value is not as good as an eminent domain appraisal

Property owners facing eminent domain may think they are getting a good deal because the condemning authority has met or exceeded the tax assessor’s “market” value of their property in their offer. Some owners may equate that to the property’s real value, but this isn’t necessarily the case. An appraisal can have errors. Many do. And eminent domain appraisals are simply different from tax appraisals and assessments.

Getting $125,000 for a property with a tax value of $100,000 seems like a great deal unless the owner finds out the property could have sold for much more.

#3: Tax value may not represent the highest and best use – and greatest value – of your property

Your property may be worth more than its tax value because just compensation should take into account not just what your property is being used for now, but the property’s “highest and best use.”

Just compensation for property is based on its highest & best use.
Let’s say, for example, you use your land as your primary residence. As residential property, it may be worth $100,000. But what if your land could be used much more lucratively for commercial purposes? Its value on the market may be $200,000 or more. That’s its highest and best use as a piece of land, and that’s what you should be compensated for here.

In that example, an offer for $125,000 is much less than you deserve and not a great deal at all. 

For these reasons and more, we recommend not settling for the tax value of your property unless you have up-to-date information – like an accurate eminent domain appraisal – showing that the tax value is indeed the property’s true value. Instead, you should consult with an eminent domain attorney and pursue the eminent domain fair market value for your property based on its highest and best use.

So what is the eminent domain fair market value for your land?

Your property’s eminent domain fair market value – and thus what you may be owed in just compensation – can be determined by many factors, including:

  • The size of your property
  • The location of your property
  • How much properties like yours have recently sold for (typically investigated for residential properties)
  • How much income your property generates (typically investigated for commercial properties)
  • How accessible your property is
  • How zoning laws apply to your property
  • Unique aspects your property possesses, such as water features
  • The level of development on and around your property
  • How your property is currently being used
  • Your property’s “highest and best use”
  • How the condemning authority intends to use your property

Note: Unfortunately, your emotional connection to your property is not a factor.

How the GA Eminent Domain Law Firm can help you

When trying to determine the true value of your property, don’t just get your own appraisal. Getting your own can harm your case instead of help. Instead, consult with an experienced attorney who has a network of land experts that can help you build your case.

Our firm is led by four attorneys who formerly worked for a state DOT, handling some of their most high-stakes cases. And we’re proud of the results we’ve achieved for clients. Since our firm began, we’ve recovered for our clients on average nearly 3x their initial offers from the government.1

We work on a contingency fee basis, meaning we advance all the costs of building your case for more compensation. Your initial offer is 100% yours to keep. And if we don’t recover additional compensation for you, you don’t owe us a penny – that’s our second-check guarantee!2

Not sure if you’re getting a fair offer for your property? Get clarity at no obligation with a free case evaluation. Call 1-888-391-1339 today!

About David Needham

David Needham handles eminent domain cases in both North Carolina and Georgia. He has an abundance of experience, having successfully started eminent domain and REO (Real Estate Owned) practices.1 David is licensed to practice law in North Carolina, Georgia, Florida, and Virginia, has represented clients in real estate closings and eminent domain cases for more than 15 years, and speaks regularly at eminent domain town hall meetings. He is co-author of A Guide to Eminent Domain in Georgia: Understanding Your Client’s Rights and Protecting Their Interests. He is co-atuhor of A Guide to Eminent Domain in Georgia: Understanding Your Client's Rights and Protecting Their Interests.