For anyone operating in the commercial real estate sector in Georgia, one of the most impactful legislative developments of 2025 is the enactment of HB 586, which amends the state's intangible recording tax. Historically, this tax—$1.50 per $500 of recorded loan amount—applied to all real-estate-secured notes exceeding 36 months. Effective July 1, 2025, HB 586 extends the short-term exemption threshold to notes with maturities up to 62 months (just over five years), eliminating the tax liability on a broader range of medium-term financings. This change aligns intangible tax treatment more effectively with borrower strategies, enabling five-year fixed-rate or balloon loans to avoid what previously would have been up to tens of thousands of dollars in tax costs.
For borrowers, owners, and developers, the expanded exemption provides meaningful cost savings and enhanced structuring flexibility, directly reducing closing costs and allowing financing terms to better match project or hold-period timelines. It also diminishes refinance risk tied to shorter loan cycles and supports longer amortization strategies with shorter maturity dates to maximize cash flow. Lenders and borrowers should now proactively evaluate how to capture these savings: aligning maturity terms within the 62-month window offers immediate tax benefits, even on notes with longer amortization schedules. As a result, deal structuring, term negotiation, and lender conversations should be updated to reflect the tangible benefits introduced by HB 586.
Navigating the evolving landscape of Georgia real estate finance law requires experienced counsel who can turn legislative changes into strategic advantages. At Morris, Manning & Martin, LLP, our commercial real estate team is uniquely positioned to help clients capitalize on the benefits introduced by Georgia House Bill 586. Whether you’re negotiating loan terms, restructuring debt, or evaluating closing costs on a new acquisition, our attorneys provide practical, business-oriented advice that ensures compliance while enhancing deal value.
