Tennessee Property Tax Exemptions: What Are They?

A homeowner fills out a Property Tax Exemption form.

Are you a homeowner in the state of Tennessee struggling with your property tax bills? If so, you should seek out property tax relief programs in Tennessee. Homeowners in Tennessee pay a median property tax bill of $1,088 per year. 

The state has property taxes that are only 50 percent of the national average. Regardless, state law benefits many taxpayers and provides further property tax relief options. For instance, disabled homeowners who served in the army have certain property tax exemptions.

Do you want to find out more about Tennessee property tax exemptions? Then, keep reading the information below about property tax exemptions and ways to reduce your property tax bill. Let’s get started!

An Overview of Tennessee Property Taxes

Tennessee does not have the same personal income tax based on your annual income as other states do. The state’s income tax is not based on taxing wages and yearly salaries. Instead, Tennessee’s Hall income tax focuses solely on taxing income from interest and dividends.

That tax equals 5 percent on stock dividends, bond interest income rates, and promissory note interest. However, even that tax has an exemption on the first $1,250 of individual income tax returns and $2,500 for joint income tax returns. 

A property owner with a disability will also have an exemption. Eligibility requirements for that tax exemption also include age. In addition, the sales and use tax rate in Tennessee is 7 percent. Further, local tax rates in Tennessee can reach 2.75 percent or drop down to 1.5 percent.

On average, state property taxes reach about $1,088 every year. Yet, the property taxes in Tennessee depend on the county of your residence and the market value of your home. 

The property tax rate per county ranges greatly in Tennessee. For instance, in Anderson County, the property tax rate is 0.83 percent, and it is 0.78 percent in Carroll County. However, in White County, the county taxes are only 0.47 percent.

In Hamilton-Chattanooga county, the property tax rate is $2.2373 per $100 of your personal property’s value. If you live in a more wealthy region of Tennessee and property taxes are high, you may need to get a tax relief application.

Furthermore, veteran homeowners with disabilities have specific property tax exemptions in Tennessee. If you’re in that situation, the application process for exemptions includes the following:

  • Apply for a tax exemption for every portion of your land
  • Fill out an application for the Tennessee Comptroller
  • Provide proof of ownership of your home
  • File financial information or income from the last year with your application
  • The local government agency will look over the application to ensure it has all requirements filled out
  • An attorney then reviews the information in the application and provides an initial determination
  • The attorney may seek more information 

The entire process may take as long as six months. In Tennessee, certain organizations may also have an exemption from property taxes, such as religious establishments, non-profit educational centers, or scientific institutions. 

The county trustee’s office will let you know whether you are eligible for the property tax exemption.

Tennessee Tax Laws

Tennessee tax laws involve Hall income taxes based on taxing the dividends and interest in your income. All goods and services, like retail sales in Tennessee, have a sales and use tax. These particular taxes range from 1.5 to 2.75 percent. 

For homes that are in probate due to the owner not leaving a valid will, the process of selling the home might take longer. The courts will fine-comb the deceased’s final wishes to ensure that the property goes to the correct person. 

Since Tennessee doesn’t have an Inheritance Tax, you should not have to worry about paying any taxes on a probate property. 

The Tennessee Comptroller and your county trustee’s office are in charge of enforcing Tennessee tax laws on a property assessment. These laws assess real estate property taxes, which have rates based on the assessed home value. 

Sometimes, the taxable part of a home’s value, as deemed by an assessor, could only account for part of that value based on Tennessee tax laws. For instance, if a house costs $300,000, the state tax laws may require a property tax on only half of that home’s value. That amounts to $150,000.

While you are still paying a mortgage, you have likely positioned your monthly mortgage payments into an escrow account. In that case, your property taxes get paid as part of your monthly mortgage payments. 

Once you have paid off your house, you will need to pay the entirety of your property taxes by yourself without relying on your lender. If the taxes grow too high, you can apply for a tax exemption.

You can also avoid future property taxes when selling a house in Memphis. If you cannot handle the costs of home maintenance, property insurance fees, and property tax rates, you can consider selling your place and finding another residence to rent.

However, the capital gains tax TN home sellers face can also get steep. Luckily, most homeowners have gotten a capital gains tax exemption after selling their properties.

Tennessee Property Tax Exemptions

The state of Tennessee has multiple property tax exemption programs available. For instance, if you’re a disabled veteran, you can get a property tax exemption in the state. The top property tax exemption programs in Tennessee include:

  • Senior property tax exemption
  • Veteran property tax exemption
  • Disability exemptions
  • Homestead tax exemptions

Senior citizens who reach a specific age are qualified for property tax exemptions. In particular, Tennessee homeowners who reach 65 years of age or older by December 31, 2022, and have a household income of $42,440 or less, can get a freeze on their property tax bills.

Along with low-income elderly people, disabled homeowners and disabled veterans also have property tax relief options. Your tax relief payment will depend on your home’s value and the property tax rate in your county. 

Only disabled veterans can qualify for property tax relief in Tennessee. In particular, the veteran needs to have a permanent and total disability, such as:

  • Legal blindness
  • Paraplegia
  • Loss of use of two or more limbs
  • Permanent paralysis of both legs

The maximum market value of the property meant for tax relief cannot exceed $175,000. Furthermore, other permanently and completely disabled homeowners have access to property tax relief. That property tax relief amount applies to no more than $27,000 for the house’s full market value.

Homestead protections also provide property tax exemptions for unmarried Tennessee homeowners who are 62 years old or older. The homestead tax amount exemption reaches as much as $12,500. 

However, married homeowners with one spouse younger than 62 years of age can have an exemption of $20,000. A homestead exemption for married couples over 62 years of age reaches $25,000. These are the basic property tax exemptions in Tennessee.

A homeowner calculates Property Tax Exemptions in Tennessee.

How To Find Out If You’re Exempt from Property Taxes

You can speak with tax accountants in Tennessee to see if you are eligible for a property tax exemption or property tax relief. You can also speak with professionals from the Tennessee Comptroller’s office. A few of the typical exemption eligibilities you may qualify for include:

  • A homestead tax exemption for people who are at least 62 years of age
  • A senior citizen property tax exemption for low-income senior citizens
  • A disabled veteran tax exemption
  • A disabled homeowner’s property tax exemption

Furthermore, the surviving spouses of veterans can gain property tax relief eligibility in the state of Tennessee. Furthermore, the Tax Freeze Act of 2007 allows local counties to implement a Property Tax Freeze Program depending on the needs of their residents. Specifically, the program allows senior citizens to freeze their property taxes for a qualifying year.

Those looking to apply for the program need to show a proof of age identification document and a proof of ownership document for their home. They also need to include additional information indicating the property is their primary place of residence in their application. Essentially, the state includes numerous tax relief and exemption programs for homeowners.

Conclusion

Can you handle the property taxes on your home for the next tax year? If you’re struggling to cover these fees, you may need to apply for Tennessee property tax exemptions. You may also qualify for tax relief programs established in the state.

If you are a disabled veteran or any permanently disabled homeowner in Tennessee, you can gain property tax relief help. Furthermore, those who are 62 years of age can qualify for homestead tax exemptions. Low-income elderly citizens can also get property tax relief in Tennessee.

Yet, if you don’t qualify for any property tax exemptions and cannot cover your mortgage payments, you may need to sell your home. You can sell a house fast in Cordova if you contact cash home buyers in Tennessee. Actually, we buy houses Memphis locals enjoy, so call us today!

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