8 Tennessee Property Tax Laws That You Need to Know Before Selling

A lawyer explains Tennessee property tax laws to a homeowner interested in selling her home.

If you are living or moving from Tennessee, figuring out how to pay property tax or sell your house can be challenging as a homeowner. Besides, if there’s insufficient information as a taxpayer, a property owner could pay excessively or owe more than necessary.

Do you want to sell a house fast in Cordova? It’s important to understand how the local government implements property tax laws. When including everyday sales — even gasoline, state, and federal taxes — you can get confused with all the taxes you owe. This article can be your guide to property taxes in TN 2023.

Tennessee Property Tax Laws

In Tennessee, the Department of Revenue isn’t responsible for rounding up tax collection. It’s the city governing bodies or the county commission’s liability to determine, assess, and collect the required tax amount.

With the help of the State Board of Equalization, the organization designates procedures and policies for local assessors who perform beyond county levels.

Likewise, the Division of Property Assessments — a unit of the Comptroller of the Treasury — monitors the operation of local assessors to guarantee that they conform to state policies. Likewise, the division offers technical help, provides manuals, and even gives educational programs to observe. 

The following are the property tax laws of Tennessee you need to know before selling or even buying a property:

  1. The county assessor calculates property taxes based on the value of the property. Likewise, you can use the Tennessee property tax calculator to understand your taxes at your fingertips. The property tax rate depends on real property. The set of tax laws can change frequently, so it’s good to contact the Department of Revenue or a qualified tax professional for much more accurate information.
  1. Property taxes are due annually. The local government sends tax statements of assessed value during the first year of October and continues the following year. They address the mailed tax bills after the owner from the record — who’s assumed responsibility for paying taxes.
  1. Tax payments start on the first Monday of October. The entire settlement should happen before the last day of February — to avoid paying interest and delinquent taxes.
  1. Like most states, Tennessee also offers a tax relief program. The state provides eligibility for disabled, elderly, or disabled veteran homeowners. The assessor’s office also assesses, reimburses, or provides exemptions on property taxes of a property owner with a low income. TN property tax exemptions may include:
  • Age
  • Disability
  • Ownership
  • Residency
  • Income
  1. Property taxes may deviate, and every tax rate can vary in different counties. Always check with the county trustee’s office or your assessor of property in your county — to determine the accurate property tax rate in your location.
  1. If there are irregularities in your property tax rate, you can file an appeal at the Assessment Appeals Commission in the Tennessee Comptroller of the Treasury. The filing of and reviewing of the decision happens within 45 days, and the Final Decision and Order develop within 90 days.
  1. Taxes on real estate are lien to the property. This state law mandates property owners to settle all payments before selling a real property — which can affect the ability of the auctioneer to market ownership and even the market value.
  1. Property taxes can divide or disseminate at closing. After selling a property, the prorated taxes can assist buyers in paying their tax share for the time they own the stated property.

Memphis TN Tax Laws

The following are the tax laws in Memphis, Tennessee — for your familiarity and how to avoid tax penalties:

Hall Income Taxes

Tennessee — as one of the seven states that don’t impose taxes on wages and salaries — workers don’t need to file Income Tax Returns (ITR) for personal taxes. 

However, the state imposes taxes on a specific income — interest, and dividend. Known as hall income tax, it rates 5% on:

  • Stock dividends
  • Promissory note interest
  • Bond interest income

In addition, hall income taxes can provide exemptions for age and disability. The state also set a general exemption for the first $1,250 of individual and $2,500 of joint income returns.

Sales and Use Taxes

The sales from retail, whether leases or rentals — the state assesses and extracts the taxes from these different goods and services. In 2017, the approved state sales and use tax rate’s roughly 7%. 

For instance, if a consumer from Tennessee buys a product online outside the state, the tax imposed is the Tennessee sales and use taxes on the transaction. 

The local tax rate can range from 1.5% to 2.75%, while the state government may charge additional rates. The state also imposes 2.75% for items priced between $1,600 and $3,200.

Property Taxes

Residential, commercial, or tangible personal property obliges mandatory property tax. These possessions may include:

  • Land
  • Buildings
  • Structures
  • Permanent fixtures

Similarly, personal property may enclose:

  • Gears
  • Tools
  • Machinery
  • Furniture

As mentioned, the counties assess and levy the property taxes — so tax rates could vary. The state charges tax rates associated with property as dollars per $1,000 of the appraised value.

Sin Taxes

The state imposes this tax on consumer products like alcohol and cigarettes. Sin taxes also function as additional taxes — or excise tax — as the state esteem these products as vices.

Sin taxes can also help discourage consumers from buying these products as they are detrimental. 

A judge issues Tennessee property tax relief.

Tennessee Property Tax Relief

The state likewise offers property tax relief programs to homeowners, such as:

Elderly or Disabled Homeowners

For eligibility, the combined annual income of the living owner and spouse should not exceed $31,190. The sources of annual income may include, but are not limited to:

  • Worker’s compensation
  • Total interest and total dividends
  • Social security payments
  • Medicare deduction
  • Net income and expenses
  • Salaries and wages
  • Supplemental security income
  • Retirement and pension benefits
  • Veteran’s benefits
  • Unemployment compensation
  • Alimony

Disabled Veterans

This tax relief program can provide disabled veterans who qualify and meet specified eligibility criteria. To meet the provision, a veteran should have a 100% disability rating. 

Likewise, the disability should result from combat or being a prisoner of war. There’s no limit to a veteran’s annual income, and the state provides tax relief at first $175,000 of the market value.

Tennessee Property Tax Programs

Tax freeze program can provide qualifying homeowners 65 years and older with withholding their property tax due — at the amount during the year they qualify. This program enables homeowners to “freeze” their tax bill even if the tax rate increases — as long as they meet the requirements.

Upon evaluation, the applicant must present the following requirements:

  • Proof of age
  • Proof of ownership
  • Property evidence

Applications for the tax freeze program should conclude by April 5, and contact the Office of the Trustee for questions and applications.

In addition, the taxpayer should provide income records where income should not exceed $44,510 in Davidson County. Income records must include tax returns, together with significant attachments. Afterward, the applicant will sign an income verification form which is public record, but the financial statements remain confidential.

Who Is Responsible for Setting Taxes?

The Tennessee Department of Revenue (TNDOR) handles the state and use tax, while counties regulate property taxes. Yet, local governments have the authority to set tax rates under state law.

Each government body — like city or council commissions — is accountable for setting rates according to their jurisdiction. They hold meetings and review appropriate proposed budgets and implementing rates to fund public and community services.

Usually, these tax collections go to schools, public works, and police and fire departments to improve their services and facilities.

What Are Your Tax Rights?

As a taxpayer, you should receive courteous treatment, accurate information, and prompt responses to all questions. You can also make the most of accessing public records while keeping the provided individual information private, enclosed, and confidential.

You also have the privilege of understanding and clarifying each department’s policies and resolving disputes promptly. The amount billed should provide accurate and accordingly explained data in simple language.

In addition, you must get the entire refund — while you can voice your concerns, suggestions, and necessary requests. They also permit taxpayers to attend meetings or informal conferences for your inquiries.

You have the right to due process, appeals, and installment payments. If you are eligible, assessing and granting tax relief is also essential. All of this while keeping your personal information covered by the law.


Tennessee has various laws with which taxpayers need to comply. This set of taxes includes property tax, sales and use tax, hall income tax, and sin taxes. There are also points to determine about Tennessee Property Tax Laws when buying or selling a home within the state. These laws may enclose appeals, assessments, and tax rates.

In addition, it covers relief and tax programs for the disabled and elderly. These collected taxes benefit the local government’s budget to improve the community and develop its constituents. The state protects taxpayers by implementing laws and an array of rights for homeowners.

Contact us today if you’re looking for cash home buyers in Tennessee with the knowhow to get you a fair deal. We buy houses Memphis residents know will be on their terms, with complete transparency about the process every step-of-the-war. 

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now...

We buy houses in ANY CONDITION in TN. There are no commissions and no obligation whatsoever. Start below by telling us about your property or call (901) 531-9917...
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *

Call Us!