In 2015, Astor ATL, LLC purchased three properties located in DeKalb County, Georgia, through separate foreclosure sales. In 2016, the county Board of Tax Assessors (Board) assessed the property taxes for each property in excess of Astor's purchase price, so Astor appealed the tax assessments--first to the county board of equalization, which upheld each assessment, then to superior court.
Under Georgia's statutes, properties are assessed at their fair market value, but a statutory provision provides a limitation on the maximum allowable fair market value. Under that provision, "the transaction amount of the most recent arm's-length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year." Relying on this provision, Astor moved for summary judgment, arguing that its purchases were arm's-length, bona fide sales, and therefore the 2016 tax assessments were limited to the 2015 purchase prices. The Board opposed the motion, arguing that a foreclosure sale did not qualify as an arm's-length, bona fide sale because the sellers were not willing participants and were not acting in their own self interests. The trial court granted Astor's summary judgment motion, and the Board appealed.
The Georgia statute provides a definition of an arm's-length, bona fide sale. That definition provides that a transaction must occur in good faith carried out by unrelated and unaffiliated parties, each acting in his or her own self-interest. The definition expressly includes, but is not limited to, distress sales, short sales, bank sales, and sales at public auction.
The court of appeals concluded that a foreclosure sale could serve as an arm's-length, bona fide sale under some circumstances. Acknowledging its cases on...