Vehicle Transfers and Divorce in Georgia
Best practices for transferring vehicle titles in divorce
Georgia' TAVT TaxBeginning in 2013, Georgia implemented a new car tax system. For vehicles bought after March 1, 2013, drivers no longer pay the ad valorem, aka birthday tax on their cars. However, they are responsible for paying a Title Ad Valorem Tax. The Title Ad Valorem Tax is based on the fair market value of the vehicle.
How does TAVT impact divorceIt is not uncommon for a spouse to be driving a car that is titled in the other spouse's name. When divorce happens it is necessary to transfer title to the spouse receiving the car. TAVT applies every time the title is transferred. Therfore, if clients and their attorneys are not careful, the client may be hit with a hefty TAVT fee and not even know it. TAVT allows titles to be transferred to family members at a tax rate of 0.5%, a big difference than the rate for non-family members. After a divorce is finalized, the marriage is over, meaning that the former spouses are not related and the family tax rate would not apply. So, the best way to avoid hefty taxation of vehicles, is to ensure that any title is transferred before a final order is signed.