Your Guide to Property Tax in Tennessee (2023)

A house is listed for sale in Memphis, TN.

Homeowners will be happy to learn that Tennessee property tax rates are lower than the national average. Unfortunately, these lower tax rates do not apply to the entire state of Tennessee. A property owner’s tax bill can be affected by several factors.

Every homeowner would like to lower their property tax bill. We will discuss some of the things that may increase your tax amount and suggest ways that you can reduce it for the next tax year.

Each county has its formula for assessing and collecting taxes. The county assessor will determine the tax payments based on property values and the property tax rate. Shelby county has one of the highest property tax rates, while Fayette county has one of the lowest.

Property Taxes in Memphis Tennessee

Tennessee has one of the most affordable property tax rates of all the states. The median property tax bill is $933.00 per year. 

The current property tax rate for Memphis is 1.37%. The county commission calculates these tax rates, and they consider the needs of the local government when determining the rates. Currently, Memphis has the highest property tax rate in the state.

The county tax rate varies from county to county. When considering buying property in Tenessee, it is a good idea to use a property tax calculator to determine the tax amount you will be paying. You will need to know about capital gains taxes in TN and property taxes when you sell a house in Tennessee.

Property tax can add thousands of dollars to your yearly budget. Counties typically collect about 0.68% of a property’s assessed value. You will appreciate this information when you want to sell a house fast in Cordova.

A local tax assessor will consider a property’s assessed value, the current assessment ratio, and property exemptions and abatements. The property assessor will determine the property’s tax amount owners must pay.

The county assessor will assign a value to all property. Assessments are done every four to six years to ensure that the estimates reflect the property’s actual market value.

Property owners who feel their assessment is too high can contact the assessor’s office to discuss their options. If unsatisfied, they can formally contact the State Board of Equalization and Appeal. The State Board of Equalization is the government agency that considers all requests and creates the regulations that every property assessor must follow.

The county property tax is applied to the appraised value of the property. For residential property, the assessed value is 25% of the market value.

The Tennessee Comptroller of the Treasury will assess any property a public utility owns, and an assessor will evaluate each property individually.

Property taxes are due on the first Monday in October, and owners must pay by the last day of February, or late charges will apply. At the beginning of each month, a late fee of 1.5% will be added to your tax amount, and these late fees will continue until your property tax bill is paid in full.

Every taxpayer cringes when they see that tax bill in their P.O. Box. Can I avoid paying for it? Unfortunately, you are responsible for paying your property taxes if you own property. There is property tax relief for taxpayers over 65 years of age and disabled. The property owners must meet specific annual income limits.

The tax relief program is not an exemption. Property owners will still receive a property tax bill, and they will also receive a refund cheque for the amount they qualify for. Homeowners are responsible for applying this money to their property tax bill.

The trustee’s office can apply a tax freeze to taxpayers 65 years and older and meet specific annual income limits. The county trustee will pause a homeowner’s property tax bill when their income is below a particular amount. This amount will vary from county to county.

Taxpayers can also qualify for a quarterly payment program. They must be 65 and older and owe no back taxes to qualify. There is no income requirement for this program. This program strives to make seniors’ property bills more manageable. Quarterly payments allow time for tax relief cheques to be applied to the account.

A man calculates Property Tax in Tennessee before selling his home.

Memphis Property Tax Exemptions

The Tenessee General Assembly can grant exemptions to specific organizations owning real estate property, and state law exempt some religious, charitable, scientific, literary, and nonprofit educational organizations. The exemptions are not guaranteed, and the organization must apply to and be approved by the Tenessee State Board of Equalization.

Once an organization applies for an exemption, an exemption designee will review the file and decide eligibility for exemption.

Other property owners may qualify for property tax exemption but have more requirements. Properties such as nonprofit theatres, community art centers, and nonprofit museums can apply for tax exemption.

The State Board of Equalization will study the organization’s governing documents. These documents must show that the organization will not be making a profit for any of the owners, officers, or members. It must also show that if the organization were to dissolve, all assets would be given to another nonprofit organization.

There are a few other properties that may qualify for a property tax exemption:

  • Medical facilities and nursing homes
  • Government property
  • Property of Housing Authority
  • Housing projects constructed with HOME or Housing Trust Funds
  • Low-Cost Housing
  • Recycling or Waste Disposal Facilities
  • Private Act Hospitals
  • Burial Places and Cemeteries
  • Crops, Livestock, and Poultry

Each property owner must meet the specific requirements for an exemption.

Homestead Exemption

People who file for bankruptcy can take advantage of the homestead exemption. State law guarantees this exemption. Filing for Chapter 7 bankruptcy often means the court will liquidate your assets to pay your creditors. When you claim the homestead exemption, it protects your equity and prevents the forced sale of your home to pay debts.

They implemented the homestead exemption to protect people from losing their homes. Claiming bankruptcy is a challenging option, but it may be worth it if a homeowner can keep ownership of their home rather than being forced to sell their house with a fair offer.

A single owner who files for bankruptcy can qualify for a $5000 exemption. Married couples who file for bankruptcy can claim up to $7500.

The exemption amount increases to $12,500 if the single owner is 62 or older and $25,000 if the couple is 62 or older.

A single parent with a minor child can qualify for $25,000 and $50,000 for married couples.

If you consider taking advantage of the homestead exemption, you should also know about the wild card exemption. A taxpayer can take advantage of the wild card exemption when the equity in their home is more than the homestead exemption.

The maximum wild card exemption is $10,000; you can apply for the difference.

To be eligible for the homestead exemption, you must have bought the property at least 40 months before filing for bankruptcy. You will have to apply the homestead exemption for your previously-owned property if you have not owned the property for 40 months.

Property Tax Exemptions for Seniors and the Disabled People

In 1973, the tax relief program was approved by Tennessee voters. This program provides exemptions for senior citizens and disabled people, and a senior citizen is 65 years or older.

To qualify for the senior exemption, you must show identification with proof of age. Birth certificates, driver’s licenses, and passports are all acceptable.

You must also show proof of ownership. Property owners must show their current tax bill, receipt, or deed for the property and prove it is their principal residence. A driver’s license with the property as your mailing address is acceptable. Owners can also present a voter’s registration card, car insurance statement, or two utility bills as proof of primary residence.

To qualify for the disabled person exemption, you must present evidence of your disability. Property owners must submit their current SSA or SSI award letter. The disabled status must be recognized by December 31 of the year they apply for the exemption. Taxpayers will also have to show proof of ownership that the property is their primary residence.

All property owners must show proof that their income meets the financial requirements.

Exemptions are not automatic. Homeowners must apply and be approved.

Property Tax Exemption for Disabled Veterans

Tennessee offers a property tax exemption for disabled veterans. They must show proof that they are permanently disabled from service on or before the last day of the year for which they are applying, and veterans must show proof of ownership that their property is their primary residence.

Widows and widowers of disabled veterans are also eligible for this property tax exemption. They must show proof of disability, ownership, and evidence that the property is their primary residence. They must also show proof of marriage and spouse’s death. The widow or widower must have been married to the veteran at their death.

Conclusion Paragraph

You can take care of your property taxes at the trustee’s office or city hall. Property taxes are a reality of life that most people cannot avoid. Much like city tax, Tennessee property taxes help local government services at the county and municipal levels meaning that the taxes you pay will go directly to the services in your neighborhood.

If you want to sell a house fast in Cordova to cash home buyers in Tennessee, look no further! We buy houses Memphis locals love, so contact us today to see how we can help.

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