2026 Property Tax Trends for Affordable Housing in Georgia and Tennessee, and How Owners Should Budget for 2027
Affordable housing owners in Georgia and Tennessee are seeing very different property tax patterns in 2026. Georgia's assessment environment has been relatively selective, with many properties remaining stable while a smaller group received substantial increases tied to specific events. Tennessee's reassessment cycle has produced a broader pattern of significant valuation increases, including many assessments that appear disconnected from the restricted income of the property.
For owners preparing 2027 operating budgets, the most important lesson is that property taxes should not be increased by a uniform percentage across the portfolio. A stable property may require little or no increase, while a property coming off an appeal freeze, completing a rehabilitation, or facing a countywide reassessment may need a much more individualized projection.
Georgia: Stable Assessments With Selective, Significant Resets
Georgia has not experienced a uniform statewide increase in affordable housing assessments. Many properties have remained unchanged, increased only modestly, or continue to benefit from a three-year valuation freeze resulting from a prior appeal.
The most significant increases have generally occurred when a three-year appeal freeze expires. In those situations, counties often do more than apply a routine annual adjustment. They may remove the prior appeal value and replace it with a new market, cost, or computer-modeled value.
In one recent example, a HUD-regulated apartment community increased from approximately $4.0 million to more than $5.6 million after the assessment notice stated that the prior appeal value had expired. The property's actual restricted operating income supported a value closer to $3.6 million. That type of increase warrants careful review because the new assessment may not adequately reflect the property's regulatory restrictions or actual income-producing capacity.
Georgia counties are also focusing more heavily on rehabilitation activity, new improvements, construction costs, and property-characteristic updates. This is especially important for acquisition and rehabilitation properties. A county may recognize the completed physical improvements before the property has reached stabilized occupancy and operating income.
An appeal is not always the right decision, however. For a property with little current income but substantial construction costs on its books, filing an appeal may invite the county to examine a cost approach that supports a value higher than the current assessment. Owners should therefore consider not only whether the income approach produces a lower value, but also what other valuation evidence may become relevant once the assessment is reopened.
Tennessee: A Broader Reassessment Problem
Tennessee's 2026 reassessment cycle has produced a wider pattern of substantial increases. In a number of counties, affordable housing properties have been assessed at values that cannot easily be reconciled with their restricted operating income.
Some properties increased by more than 50% or 60%, while others remained at previously elevated values despite income evidence supporting a materially lower assessment. In several cases, county values exceeded income-supported values by more than $1 million.
The Tennessee analysis generally begins with the property's restricted operating income. Financing expenses, depreciation, amortization, and real estate taxes are removed to derive appraisal net operating income. That income is then capitalized at a reasonable rate, with separate consideration given to any remaining tax-credit benefits, USDA Rural Development interest credit, or other subsidy components.
This distinction is important because a regulated affordable housing property should not be valued as though it were an unrestricted conventional apartment complex. Restricted rents, limited rent-growth potential, extended-use requirements, below-market financing, and regulatory oversight all affect what a knowledgeable buyer would pay.
The Importance of Using Representative Operating Results
Actual prior-year financial results are generally the best starting point for an income analysis, but they are not always the most representative measure of stabilized operations.
A property may have experienced unusual vacancy, major repairs, lease-up, rehabilitation, or temporary operating disruptions. In those situations, a stabilized budget may provide a more reliable indication of expected income than the prior year's actual results.
The key is consistency and support. A stabilized budget should not be used merely because it produces a preferred result. It should be tied to occupancy history, contractual rents, recurring expenses, and realistic operating assumptions.
Subsidies Must Be Treated Carefully
Affordable housing subsidies are not interchangeable, and each should be analyzed according to its actual economic effect.
Tenant rental assistance is usually already included in rental revenue and should not be added a second time. USDA interest credit or similar financing subsidies may provide a separate economic benefit that must be considered. Remaining low-income housing tax credits may also have value, but once the credits have expired, no credit stream should be added merely because the property remains subject to continuing affordability restrictions.
Even after the tax credits expire, those restrictions remain relevant because they limit rental income and affect marketability.
The Strongest and Weakest Appeal Candidates
The strongest appeal candidates generally involve:
a substantial increase following the expiration of an appeal freeze;
a county value that implies an unrealistically low capitalization rate;
a regulated property assessed as though it were unrestricted;
a rehabilitation or construction-stage property treated as fully stabilized; or
a value that cannot be reconciled with actual operating income.
An appeal may be inadvisable where:
the assessment is already favorable compared with the income indication;
the increase is minor;
the property may still benefit from an existing freeze;
the property's cost basis could support a higher value; or
the requested reduction depends entirely on an aggressive capitalization-rate assumption.
The best strategy is selective rather than automatic.
How Affordable Housing Owners Should Budget for 2027 Property Taxes
Owners should not apply a blanket 3% increase to property tax budgets across the portfolio.
For properties with stable assessments, no pending reassessment, and no expiring appeal freeze, the most reasonable approach is generally to budget at the 2026 actual tax amount, with no more than a 0% to 1% contingency for possible millage-rate movement. Millage rates typically do not fluctuate enough to justify a larger automatic increase where the taxable value is expected to remain stable.
For properties with a pending appeal, the conservative approach is to budget the amount likely to be billed based on the current assessment. Any later reduction, refund, or tax savings should be treated as favorable variance rather than assumed in the operating budget.
Properties coming off a Georgia appeal freeze, located in a Tennessee reassessment county, completing a rehabilitation, or otherwise facing a known valuation change should be budgeted individually. The projection should consider:
the current assessment;
the supported income-approach value;
the likely appeal result;
the applicable assessment ratio;
the current millage rate; and
any known changes in property status.
This property-specific approach is especially important for affordable housing because rent restrictions prevent owners from simply increasing rents to offset higher taxes. Overbudgeting taxes can unnecessarily strain operating performance, while underbudgeting a known reassessment risk can create an avoidable shortfall.
Conclusion
The 2026 property tax environment is not uniform.
Georgia is seeing selective but sometimes significant valuation resets, particularly when appeal freezes expire or counties recognize rehabilitation and construction activity. Tennessee is experiencing a broader reassessment pattern, with many affordable housing values appearing disconnected from restricted-property economics.
For both states, the strongest valuation position remains a transparent income analysis based on representative operating results, proper treatment of restrictions and subsidies, and a realistic capitalization rate.
For 2027 budgeting, stable properties generally do not need a 3% tax increase. A 0% to 1% contingency is more appropriate where the assessment is expected to remain unchanged. Higher-risk properties should be reviewed individually rather than subjected to a portfolio-wide assumption.
