Counting the House as Retirement Money? 7 Things Georgia Homeowners Find Out When They Try to Use Their Equity

If you’re counting on a reverse mortgage to cover your bills, it’s worth knowing which ones it won’t take off your plate.

These are the things Georgia homeowners find out when they try to use their equity as retirement money.

Note: This is general information, not financial, tax or legal advice. Rules and dollar amounts are subject to change, so confirm the details with the Georgia Department of Revenue, the Internal Revenue Service and the Consumer Financial Protection Bureau (CFPB).

1. Draw Period’s End

You can borrow against your home’s equity with a home equity line of credit (HELOC) for years, and then the terms change.

The CFPB says the draw period could last 10 years, for example.

After it ends, you can’t borrow anymore and you enter repayment, often over 10 or 20 years.

Monthly payments are often significantly higher once you enter repayment.

HELOCs usually have a variable interest rate, so your payment can change from month to month.

The house is the collateral.

If you fall behind, you could lose your home.

Your lender might freeze your ability to take out more funds, which leaves you short of the money you planned on.

2. Reverse Mortgage Ceiling

Age is the first gate on a Home Equity Conversion Mortgage (HECM), a reverse mortgage that’s available only to homeowners 62 and older.

A reverse mortgage lets you access your equity without selling your house right away.

Your house has to be your principal residence, meaning you live there the majority of the year.

You must receive counseling from an agency approved by the U.S. Department of Housing and Urban Development (HUD) before you borrow.

Then comes the ceiling: HUD’s maximum claim amount is $1,249,125 for Federal Housing Administration case numbers assigned on or after January 1, 2026.

HUD applies that number to all areas, so your county doesn’t change it.

3. Bills That Stay Yours

A reverse mortgage sends you money, but the house’s bills still come to you.

You’re still responsible for taxes, insurance, repairs and homeowner association fees.

Paying property charges on time is a requirement of a HECM loan, and a default may lead to foreclosure.

Meanwhile, the lender adds interest to your balance each month.

Generally, you or your estate must pay the loan back when you die or move from the home.

Before you sign, the Federal Trade Commission says to check that the loan has a non-recourse clause.

That clause means you or your estate can’t owe more than the home is worth when it sells.

4. Georgia Transfer Tax

If you sell the house to free up your equity, Georgia charges a real estate transfer tax.

The rate is $1 for the first $1,000 of the price, plus 10 cents for each additional $100.

On a $300,000 sale, that comes to $300.

The seller is liable for the tax, though buyer and seller can agree in the sales contract that the buyer pays.

Either way, someone has to pay it before the clerk of the superior court can record the deed.

5. Home-Sale Exclusion

Selling your house for a profit doesn't always bring a federal tax bill.

You may exclude up to $250,000 of gain, or up to $500,000 if you file a joint return with your spouse.

To qualify, you or your spouse must have owned the home for at least 24 months out of the last 5 years.

On top of ownership, the home has to have been your residence for at least 24 months of those 5 years.

For married couples filing jointly, both spouses must meet that residence test.

If you excluded the gain on another home within the two years before this sale, you generally can't use the exclusion again.

You have to report a gain above the limit on your federal tax return.

6. Homestead Tax Breaks You Leave

Many Georgia homestead exemptions renew automatically each year as long as you keep living in the home under the same ownership.

A sale ends the exemption on that house.

The standard exemption deducts $2,000 from your home's assessed value, which is 40% of its fair market value.

If you're 65 or older, you can claim a $4,000 exemption from county taxes if your income, along with your spouse's, was $10,000 or less the prior year.

Retirement, pension and disability income is excluded from that total up to the Social Security maximum.

Some counties go further and freeze your home's taxable value at a base year level for as long as you live there.

The Department of Revenue's table lists 35 counties plus the City of Atlanta, among them Cobb, DeKalb, Fulton and Gwinnett.

Moving ends the freeze.

7. First Tax Bill After Downsizing

Say you sell the old house and put the equity toward a smaller home.

Georgia requires you to have owned the property as of January 1 to claim that year's exemption.

A home you buy after January 1 can't earn the exemption until the next tax year.

Once you qualify, the application is generally due April 1.

You can't claim a homestead exemption on another property in Georgia or in any other state.

That keeps the old house and the smaller home from both getting the exemption.

Deducting Home Equity Interest

Interest on a home equity loan or line of credit is deductible only when the money you borrow buys, builds or substantially improves the home that secures it.