As a young couple in our mid-20s, high on our life's to-do list is purchasing our first home. I have always wondered exactly how property taxes work in Tennessee, so I did a bit of digging and came up with a few answers. I am posting them here if anyone else has had similar questions, but I am certainly not an expert on the topic.
Appraised Value
The first element of figuring out how much property taxes will be on a piece of property is to figure out how much it was last appraised. The Comptroller of the Treasury for the state of Tennessee maintains a Web site where you can search by address or owner name after selecting in which county the property resides.
There will be a section of the report titled "Value Information". The Total Market Appraisal is the sum of the land plus improvements (buildings).
Example:
Total Market Appraisal: 191,300
Assessment
For residential property in Tennessee, the Assessment will be 25% of the Total Market Value. Commercial property is 40%, while some churches and non-profits are zero.
Example:
Assessment: 47,825
Calculating the Property Tax
Your property taxes are set each year by county and city officials. You can look up the property tax rates for all 95 counties through the Division of Assessments. There is also some historical data for comparison purposes.
Metro-Davidson County has a county tax rate of $4.04 per 100 assessed dollars (or 4.04% of the assessment). For the city of Goodlettsville, residents pay an additional $0.66 for city services like trash collection, public works, police and fire. That brings the total rate to $4.70 per 100 assessed dollars (or 4.7% of the assessment).
Example:
Property Taxes: $47,825 x 0.047 = $2,247.78
Paying Property Taxes
That amount is due each year to the county trustee. If you are paying a mortgage on the property, your lender may be paying the property taxes on your behalf. You will likely get a notice in the mail about the amount, so it is a good idea to follow-up with your lender to determine whether they have been paid.
Nashville residents can use an online service to check whether their taxes are current. Not paying property taxes usually results in some fairly nasty penalties, as most city governments rely heavily on those dollars for operations of city services (50% in Nashville).