Gov. Kemp signs Georgia tax relief bills lowering income taxes and expanding homeowner relief

Georgia Gov. Brian Kemp signed a pair of major tax relief bills into law Monday that will lower income taxes, boost deductions, and give homeowners new tools to fight rising property tax bills.

Kemp was joined at the state Capitol by First Lady Marty Kemp, Lt. Gov. Burt Jones, House Speaker Jon Burns, state agency leaders and business partners as he signed House Bill 463 and Senate Bill 33, two measures Republican leaders called key priorities during this year's legislative session.

"We've remained the No. 1 state for business for a historic 12 consecutive years because of our commitment to growing opportunity and budgeting conservatively," Kemp said in a statement. "That approach has allowed us to return billions of dollars to taxpayers, and the legislation I signed today will keep that momentum going as we further lower our state income tax rate, deliver on meaningful property tax relief, and ensure job creators have the opportunity to grow and thrive in the Peach State."

The bills stop short of the broader tax overhaul some Republican lawmakers initially pushed for earlier this year, including proposals to fully eliminate Georgia's state income tax by 2032.

Kemp also signed Senate Bill 553, which is aimed at improving pathways to licensure for construction industry jobs like electricians, plumbers, a/c contractors, and utility workers.

Lower income taxes and bigger deductions

House Bill 463, officially called the Georgia Economic Growth and Tax Relief Act of 2026, lowers Georgia's state income tax rate from 5.19% to 4.99% beginning Jan. 1, 2026, reaching a rate below 5% three years ahead of schedule.

The law also allows for future annual reductions of 0.125% until the rate reaches 3.99%, provided economic conditions allow.

In addition to lowering the income tax rate, the bill increases Georgia's standard deduction. Married couples filing jointly will see the deduction rise from $24,000 to $30,000, with annual increases of $750 until it reaches $36,000. Single filers will see their deduction increase from $12,000 to $15,000, with annual increases of $375 until it reaches $18,000. Those increases are tied to state revenue growth and only take effect if tax collections rise by at least 3%.

Families with dependents will also benefit. The per-dependent deduction increases from $4,000 to $5,000 and could eventually climb to $6,000.

The legislation also creates temporary tax exclusions for certain overtime pay and cash tips. From 2026 through 2028, up to $1,750 in qualified overtime compensation and $1,750 in cash tips will be exempt from state income tax.

Seniors will see expanded retirement tax relief as well. The retirement income exclusion for Georgians age 65 and older increases from $65,000 to $70,000 beginning in 2027.

To offset some of the cost of the cuts, the law repeals several existing tax credits and sales tax exemptions, including incentives tied to teleworking expenses, electric and hybrid vehicles, and medical equipment manufacturing.

Georgia's personal income tax currently generates about $16.5 billion annually, accounting for roughly 44% of the state's general fund revenue. Democrats opposed the measure, arguing the cuts disproportionately benefit higher-income earners and could reduce funding available for public services.

"I am proud that we have cut taxes every year I've been lieutenant governor, and I want to thank Governor Kemp for leading the charge," Lt. Gov. Jones said in a statement. "The bills being signed into law today help every family and business in Georgia."

Property tax relief for homeowners

Senate Bill 33, known as the Homeownership Opportunity and Market Equalization Act of 2026, focuses on rising property tax costs tied to increasing home values across Georgia.

The law creates a new Local Homestead Option Sales Tax, or LHOST, which allows local governments to use sales tax revenue to fund homestead exemptions and reduce property tax bills for homeowners.

Beginning in 2028, counties and municipalities may place the measure on local ballots. If approved by voters, the revenue can only be used to offset property taxes for qualifying homeowners.

The legislation also makes Georgia's existing base-year homestead exemption mandatory statewide. That exemption limits how quickly a home's taxable assessed value can rise. The law also strengthens protections for homeowners who were incorrectly charged property taxes because of government errors.

Burns called the legislation a response to affordability concerns raised by Georgians across the state.

"When Georgians across the state made clear that affordability was the number one issue they faced, Republican leadership delivered real, meaningful relief that allows hardworking taxpayers to keep more of their money where it belongs, in their pockets," Burns said.

Opponents of the law worry this will hurt local government and school budgets.

What comes next

Both bills passed during the final day of Georgia's legislative session earlier this year. With Kemp's signature Monday, the measures officially become law. 

Most of the income tax changes take effect for tax years beginning Jan. 1, 2026, while some property tax provisions will phase in over the next several years.

There's one day left for Kemp to sign bills into law or veto them before bills that passed this legislative session automatically become law.

The governor says he'll continue to sign more bills through Tuesday.