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House Bill 463, signed May 11, 2026, set Georgia's individual income tax at a flat 4.99% for taxable years beginning on or after January 1, 2026, down from 5.19%. Withholding tables changed at signing. The annual return uses 4.99% for the whole year, including a January sale. Georgia still has no preference for long-term gain. Poultry-plant goodwill and south Georgia timber are taxed at the same flat rate once they are in Georgia taxable income.
The sellers are not one market. Gainesville turns over poultry complexes. The fall line and the coastal plain turn over timber and pecan ground. Savannah's port belt turns over leased warehouses. Atlanta turns over small apartment houses whose owners want income, not another property. Each of those sales can use IRC § 453. A flat rate changes what the installment is for.
Code section 48-7-20, as amended by HB 463, sets the tax at 4.99% for taxable years beginning on or after January 1, 2026. The same subsection schedules a further reduction of 0.125 percentage point each year beginning January 1, 2027, until the rate reaches 3.99%. Every prospective step is delayed one year if, as of December 1, any of three tests fails: the Governor's revenue estimate for the next fiscal year is not at least 3% above the estimate for the current year; the prior fiscal year's net revenue did not exceed each of the three preceding years; or the revenue shortfall reserve does not cover the projected cost of the cut. The Office of Planning and Budget makes those calls. A seller cannot know in 2026 whether a 2030 payment will be taxed at 4.49% or still at something higher.
2026 Georgia rate on ordinary income and on capital gain: 4.99%, retroactive to January 1. Later 0.125-point steps toward 3.99% happen only if the revenue triggers are met. They are not a quote.
The same bill raised the 2026 standard deduction to $15,000 for single filers, heads of household, and married filing separately, and to $30,000 for joint filers. Georgia taxable income is not federal taxable income. Federally taxable Social Security is subtracted. There is no deduction for federal income tax of the kind Alabama allows, so a lower federal bill does not raise the Georgia bill.
The retirement exclusion can touch a capital gain, and it is capped. Taxpayers age 62 or older, or permanently and totally disabled, may exclude retirement income. The Department of Revenue lists capital gains, interest, dividends, pensions and annuities, royalties, net rent, and up to $5,000 of earned income. Through 2026, section 48-7-27 caps the exclusion at $65,000 at age 65 or older and at $35,000 for ages 62 through 64 or qualifying disability. Spouses qualify separately. HB 463 raises the age-65 cap to $70,000 beginning in 2027; the Governor's signing statement describes that increase. On a $1.5 million gain the exclusion is a slice. A seller who turns 65 during the installment schedule can use the larger cap only on gain recognized in a year the cap applies. Gain above the cap is taxed at the flat rate then in effect.
Georgia returns start from federal income. Installment gain is taxed at the Georgia rate for the year Form 6252 recognizes it. If 4.99% never changes, splitting a fixed amount of taxable gain across five years does not reduce the Georgia total.
Nonresidents owe Georgia tax on Georgia-source income. Gain from Georgia real property stays in that category after a move to Florida or Tennessee. O.C.G.A. § 48-7-128 requires the buyer, on a nonresident's sale of Georgia real property and associated tangible personal property, to withhold 3% of the price, or 3% of the recognized gain if the seller signs the gain affidavit. The 2026 employer tax guide repeats the 3% rule and points to Form G-2RP. Withholding is a prepayment. An installment can shrink gain recognized in the closing year. It does not forgive Georgia tax on principal recognized later, at that year's rate. Residents are outside this withholding. South Carolina still allows a 44% net-capital-gain deduction on real-property gain allocated to the state where the land sits. A tract on the Savannah River is two sourcing problems. Alabama's federal-tax deduction is a third computation Georgia does not share.
Land under a leased Savannah warehouse is capital gain. The building in the same deed brings depreciation with it. Ordinary section 1250 recapture is recognized in the year of sale. Unrecaptured section 1250 gain can ride the installment method and is taxed federally at up to 25% as payments arrive. The real-estate installment guide separates those layers. Owners done managing property, and who do not want a replacement for a 1031 exchange, are the sellers in selling rentals without a 1031.
Coastal-plain and piedmont timber is often in a family partnership. Federal section 631 elections can change whether the cutting itself is capital gain. Georgia taxes whatever character survives, at the flat rate, with no timber deduction of the Idaho kind. Poultry houses and equipment throw ordinary recapture into the year of sale; the ground under them is the installment candidate. Selling farmland is the allocation habit for a pecan grove or a Coastal Plain row-crop farm. A Columbus or Dalton plant, or a metro Atlanta specialty firm, puts goodwill and stock in the capital-gain column and equipment in recapture. Minimizing tax on a business sale is the federal map. Georgia adds 4.99% of taxable gain recognized each year, plus the retirement exclusion if age and the cap allow it. Using sale proceeds as retirement income is about the payment schedule, not about that exclusion.
A married couple, both under 62 so the retirement exclusion does not apply, sells the land under a leased warehouse. Price $1,800,000, basis $300,000, long-term gain $1,500,000. The building and its depreciation are assumed to be a separate closing-year computation and are not in this table. Other adjusted gross income is $182,200, so other taxable income after the $32,200 federal standard deduction is $150,000. The 0% federal band is already used. A five-year schedule recognizes $300,000 of land gain each year from 2026 through 2030. Principal would be $360,000 a year at a gross-profit percentage of about 83%. Interest is left out. The price is under $5 million, so § 453A is not applied.
Federal lump-sum tax on the gain: $463,700 at 15% and $1,036,300 at 20%, which is $276,815, plus $54,424 of net investment income tax. Total federal $331,239. Each installment year taxes the entire $300,000 at 15% ($45,000) and owes about $8,824 of net investment income tax. Five years total $269,118 of federal tax, about $62,121 less than the lump sum. Georgia tax if the rate stays 4.99% is $1,500,000 × 4.99% = $74,850 either way, $14,970 a year.
The third column is a scenario. It assumes every 0.125-point cut lands on time: 4.99% in 2026, 4.865% in 2027, 4.74% in 2028, 4.615% in 2029, and 4.49% in 2030, each applied to $300,000. Whether those rates happen is the trigger section. Georgia adjustments, including the standard deduction, are ignored, so each Georgia figure is the stated rate times recognized gain.
| Tax on the $1.5 million land gain | Lump sum, 2026 | Five years at 4.99% | Five years if cuts occur on schedule |
|---|---|---|---|
| Federal long-term tax plus 3.8% NIIT | $331,239 | $269,118 | $269,118 |
| Georgia tax on the gain | $74,850 | $74,850 | $71,100 |
| Combined | $406,089 | $343,968 | $340,218 |
Holding the rate at 4.99% saves an estimated $62,121 against the lump sum, all of it federal. The on-schedule path saves another $3,750 of Georgia tax, and only if no trigger delays a step. On these facts the reason to spread the gain is the federal 20% bracket and the 3.8% tax. Depreciation recapture, a related-party resale under § 453(e), or a retirement exclusion the couple later qualifies for would each move a column. This table is an estimate, not a guaranteed savings number.
A flat 4.99% of Georgia taxable income. House Bill 463, signed May 11, 2026, cut the rate from 5.19% for taxable years beginning on or after January 1, 2026. A sale in January uses 4.99% on the 2026 return even if withholding tables had not yet changed. Georgia has no lower rate for long-term gain.
HB 463 schedules further reductions of 0.125 percentage point a year beginning January 1, 2027, until the rate reaches 3.99%. Each step is delayed by a year if revenue tests fail: the Governor's revenue estimate, prior-year collections compared with the three preceding years, or the revenue shortfall reserve. A later payment is taxed at whatever rate is actually in effect that year. The stepped-down column in this article is a scenario, not a forecast.
Taxpayers who are 62 or older, or who are permanently and totally disabled, may exclude retirement income up to a cap. The Department of Revenue lists capital gains as retirement income for this exclusion, along with interest, dividends, pensions, royalties, and net rental income, plus up to $5,000 of earned income. For 2026 the cap is $65,000 at age 65 or older and $35,000 for ages 62 through 64 or qualifying disability. Each spouse qualifies separately. HB 463 raises the age-65 cap to $70,000 beginning in 2027. Gain above the cap is taxed at the flat rate.
Georgia taxes nonresidents on Georgia-source income, including gain from Georgia real property. On a sale or transfer of Georgia real property and associated tangible personal property by a nonresident, the buyer generally withholds 3% of the price, or 3% of the recognized gain if the seller provides the gain affidavit. Withholding is a prepayment, not the final tax. Installment gain recognized later is still Georgia income in the year it is recognized and is taxed at that year's rate.
It means Georgia does not have brackets to restart. If the 4.99% rate never changes, Georgia tax on a given amount of taxable gain is the same in total whether it is recognized in one year or five. The federal 15%, 20%, and 3.8% layers still change with timing. A later statutory rate cut, if it is not delayed, would tax later payments at a lower Georgia rate. Neither effect is a promise of a dollar savings on a particular sale.
Last reviewed: October 22, 2026.
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