Tennessee Property Taxes

Overview of Tennessee Property Taxes

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Tennessee's property taxes form the bulk of the local governments' budget. The state and its local governments collect $45 billion in revenue annually, $5 billion of which is from property taxes, or 11.8% of total revenue. Subsequently, Tennessee has some of the lowest property tax rates in the country. The average annual property tax bill in the state is $1,120, about half the national average. However, property tax bills vary from county to county. For instance, homeowners in Memphis, the most populous city in Tennessee, pay almost twice the state average in property taxes.

The average home value in the Volunteer State is $179,423. Property owners in the state pay 0.76% of their home's value in property tax annually. This adds up to $7.66 for every $1,000 in home value. The responsibility of administering Tennessee property taxes falls with county officials, starting with the County Assessor who determines a home's assessed value. Appraisals to determine your home's market value are conducted in four to six-year cycles. Tennessee property tax rates are determined by the County Commission by calculating the budget needed by the local government bodies against the total assessed value of the properties within their jurisdiction.

It is worth noting that Tennessee property taxes don't apply to your home's full market value. Instead, taxes are applied to the assessed value. The assessed value for residential property owners translates to 25% of the home's total market value. Assuming your home's market value is $100,000, your tax rate will apply to 25% of that value, i.e., $25,000.

If you feel your home has been over appraised, the State of Tennessee offers avenues to appeal property taxes. Homeowners willing to appeal are required to register their complaints with the local County Assessor first. If you disagree with the assessor, you can file an official appeal with the County Board of Equalization.

If you are planning to buy a home in Tennessee and want to understand how much your property tax bill could potentially cost, check out our Tennessee Property Tax Tool to see what your bill would be.

Tennessee Property Tax Due Dates

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Tennessee property tax rates are decided by the county commission and city/municipal governing bodies. The taxes are then collected by county trustees and city collecting officials. Property taxes for the current year are mailed out to homeowners by October 1st. New homeowners receive their property tax bills as of January 1st. If you recently purchased a home, you are advised to consult your title company to determine if you are responsible for paying the taxes.

When are property taxes due in Tennessee? Homeowners are expected to pay their property taxes from the first Monday of October to the last day of February. Some counties accept partial payments for your convenience. However, you should consult your local county trustee to determine if your county accepts partial payments. If the Tennessee property taxes are paid in full, there are no penalties. Additionally, the state does not offer discounts to homeowners who pay their taxes early.

What happens if you don't comply with the Tennessee property tax due dates? Beginning March 1st and the first day of each subsequent month, you attract a 1.5% interest per month on your tax bill. The state has a legal process that allows the taxing authority to sell your home if your property taxes become delinquent. You can lose permanent ownership of your home after the tax sale. However, the state offers homeowners a "redemption period" in which they can still pay the delinquent taxes and accrued interest/penalties to avoid losing their homes. It is also noteworthy that if the post office does not postmark your Tennessee property taxes paid by the due date, it is considered a late payment, even if you did mail your payment on time.

Tennessee Property Tax Exemptions

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Apart from the option to appeal your property taxes, the state of Tennessee offers several tax exemptions to homeowners who meet certain eligibility requirements. The most common ones are senior and homestead exemptions. Qualifying parties can potentially lower their Tennessee property taxes. However, even eligible property owners are not exempt from Tennessee property tax due dates.

Tennessee Homestead Exemption

To qualify for the homestead exemption, homeowners must be using the property, including home and condominium, as their principal residence. Under this exemption system, you may be exempt up to $5,000 of your home. Joint owners, for instance, married couples, can claim up to $7,500. Additionally, homeowners with a minor dependent on the household can claim an exemption of up to $25,000. Note that the exemption doesn't relieve you of paying Tennessee's property taxes.

Tennessee Senior Citizens Exemption

The senior exemption allows unmarried homeowners who are 65 years or older to claim up to $12,500 on a home they use as their principal residence. Additionally, married couples where one party is at least 65 years of age can claim up to $20,000 on a home they use as their principal residence. If both married parties are 65 years and above, they can potentially claim up to $25,000. Thousands of residents benefit from this program each year, which reduces their Tennessee property taxes.

Other Exemptions

Other Tennessee property tax exemptions include disabled veterans or surviving spouses of army veterans killed in action. The veteran must be 100% disabled from active duty as determined by the Veteran's Association. No income requirements are applied to these veterans or their surviving spouses. The disabled are also offered an exemption if they use the home as their primary residence, and their annual income does not exceed $29,270.

How to Appeal Your Property Taxes in Tennessee

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According to Tennessee state law, the County Assessor appraises and assesses property. However, homeowners who disagree with the assessment value of their property can appeal their Tennessee property taxes. The process starts by contacting the local assessor's office. However, the assessor can only hold an informal review, and homeowners should file an appeal with the Local Board of Equalization to preserve their appeal rights. The Board consists of five to seven persons who are mandated to listen to disputes and make the required changes to the disputed assessments.

The process of filing an assessment appeal varies across Tennessee though it generally follows the same steps from county to county:

1. Obtain your assessment
2. Determine if you are overassessed
3. Complete forms needed to appeal
4. File property tax appeal
5. Prepare for hearing
6. Attend hearing
7. Appeal the decision

More details regarding the appeal process can be obtained from the Tennessee Comptroller of the Treasury's website.

How to Appeal Your Property Taxes in Shelby County

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For a better demonstration of the appeal process, here is a detailed breakdown of the process in Shelby County, the largest and most populous county in Tennessee.

Obtain your assessment

The local county assessor assesses residents of Shelby County. For more details on how you can obtain your assessment details, visit the Shelby County assessor's website.

Determine if you are over-assessed

A successful appeal has to show that your home's value is less than the County Assessor's. TaxProper's search tool can help you check similar properties to establish market value. The Shelby County assessor's website also has a search tool that you can use to search neighborhood sales and real property records.

Complete forms needed to appeal

More information and forms needed to file an appeal to the Shelby County Board of Equalization can be found on the County Assessor's website.

File property tax appeal

Homeowners who wish to appeal their property taxes can file with the Shelby County Board of Equalization no later than June 30th of the tax year. Failure to appeal within the stipulated timeframe can result in the loss of your appeal rights. The Board strongly advises homeowners to appeal using their online system for a simple and faster process.

Prepare for hearing

Preparation for an appeal hearing includes collecting evidence disputing the assessor's valuation of your property. Successful evidence can include comparable sales, independent appraisals, maps showing access limitations, and documents from government agencies/experts regarding development limitations.

Attend hearing

Shelby County requires homeowners to attend an appeal hearing so that they can give oral testimony and provide other evidence to the Board. It is noteworthy that, by law, the County Assessor is presumed to be correct, and the burden of proof lies with the appealing party.

Appeal the decision

If you are not satisfied with the decisions made by the County Board of Equalization, you can appeal to the State Board of Equalization. The appeal will be heard by an administrative judge. If you disagree with the State Board of Equalization's decision, you can file another appeal with the Assessment Appeals Commission, which decides within 90 days of the hearing.

Property Tax Information for Tennessee Counties

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The table below provides county-level information about how property taxes work in each Tennessee county.

Want to learn more? Click the county links to learn more about a specific Tennessee county.