Georgia House Bill 586 Expands Loan Flexibility and Tax Exemptions

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Burr & Forman

On May 9, 2025, Governor Brian Kemp signed into law House Bill 586, which significantly amends Georgia’s intangible recording tax provisions. Effective July 1, 2025, the bill extends the maturity threshold for “short-term notes” from 36 months to 62 months—a change that could offer substantial tax savings and increased flexibility for lenders and borrowers alike.

Key Provisions:

  • Extended Maturity Limit: Loans with terms up to 62 months (5 years and 2 months) may now qualify as “short-term notes” and be exempt from Georgia’s intangible recording tax.
  • Revised Definitions: The bill updates the definition of “long-term note secured by real estate” to reflect the new 62-month threshold.
  • Compliance Requirements: Instruments securing such loans must clearly state the amount and due date, or indicate that the note matures within 62 months, to comply with Code Section 48-6-66.

Why This Matters:

  • Cost Savings: Qualifying loans may avoid the intangible recording tax, which can result in significant savings—especially for large commercial transactions.
  • Financing Flexibility: Lenders and borrowers can now structure medium-term financing with greater tax efficiency.
  • Strategic Opportunity: Clients should review existing and pending loan agreements to determine whether restructuring could yield tax benefits.

Next Steps. We recommend evaluating your current loan portfolio and upcoming transactions to assess the potential impact of HB 586. Our team is available to assist with compliance strategies and documentation updates.

For the complete text of the HB 586, click here

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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