A new Georgia law, House Bill 586, brings good news for real estate borrowers and professionals across the state. Effective July 1, 2025, real estate loans with a term of 62 months or less (5 years and 2 months) shall be exempt from Georgia’s intangible recording tax, which exemption threshold was previously set at a loan term of 36 months (3 years) or less.
What is the Intangible Recording Tax?
When you take out a real estate loan in Georgia, an intangible tax may apply if the loan is considered “long-term” (previously defined as longer than 3 years). This tax is usually paid by the borrower and is due when the security deed is recorded with the county. The current tax rate is $1.50 per $500 of the loan amount (rounded up), which is approximately 0.3% of the loan amount.
What’s Changed?
Under the new law, a loan will now be considered short-term, and exempt from this tax, if the principal balance of the loan is due within 62 months from the date of its origination. That’s a big jump from the previous 36-month cutoff.
Who Will Benefit?
This change will have the greatest impact in the commercial lending sector, as commercial loans typically have shorter terms than residential mortgages. However, a residential mortgage with a loan with a term no greater than 62 months will also be exempt from the tax.
How to Take Advantage
If you’re considering a real estate transaction or financing arrangement, this new exemption window might save you money. To take advantage of the 62-month rule:
- Make sure your loan terms qualify: no principal payments can be due more than 62 months after the loan date.
- Have your attorney or closing agent properly structure and document the loan.
- File the appropriate document with the applicable county to secure your exemption.
At Blasingame, Burch, Garrard & Ashley, P.C., our real estate attorneys stay up to date on laws that impact Georgia property owners, developers, and investors. If you’re planning a purchase, sale, or private loan, we can help ensure your transaction complies with and takes full advantage of current laws and regulations.
Contact us today to learn more or to schedule a free consultation. You can reach us by phone at 706-354-4000 or fill out our online contact form and someone will be in touch.
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