A Guide to Tennessee Property Taxes

Are you preparing to buy a home in Tennessee? In addition to researching the area, home insurance, and finding the right home, you likely have questions about property taxes. These levies can add thousands to your yearly home expenses, so understanding how they’re calculated is key to finding a home inside your budget.

When it comes to Tennessee property taxes, we’ve used our real estate experience to tackle all the questions you might have. This guide will give you the necessary information to make informed home-buying decisions. Learn how Tennessee property taxes are calculated and what you can expect from your home ownership.

About Tennessee Property Taxes

Tennessee, like most states, has a property tax. The tax is based on the value of the property. The county levies and collects this tax on real estate (land and buildings).

Tennessee’s property taxes fund local government services at the county and municipal levels. As such, the Tennessee Department of Revenue does not collect property taxes. Local property tax rates are established by the county commission and city council. County trustees and city collectors handle property tax collection. The county assessors appraise real estate, and tangible personal property used or held for use in a business is taxed according to assessment standards.

The State Board of Equalization is the government agency that regulates property assessors and hears appeals beyond the county level. It makes sure property valuations are fair across the state.

How Tennessee Property Taxes Work

Tennessee counties assess properties and appraisal ratios on a four-to-six-year cycle as set by the local assessor. The property value is based on the determined value on January 1 in the reclassification year. The local assessor of property also determines the millage rate. The real parcel appraisal and millage ratio adjustment don’t always happen in the same year. Your taxes can differ within a cycle because your property value or the millage rate has changed. The Comptroller’s office publishes a complete list of the Tennessee reappraisal schedule.

How a property is used determines how it will be classified for real estate tax purposes. The government appraises the value of the property. It then applies a percentage (known as an assessment ratio) to that value. The assessment ratio for the various classifications is determined by state law.

Tennessee’s classes of property are :

• Residential
• Agricultural (Farm)
• Commercial and Industrial
• Public utility
• Business personal

Since we are most interested in residential property, the assessment ratio for that category is 25%. To begin calculating your property tax, multiply the home’s appraised value by the 25% assessment ratio.

Next, you need to find the tax rate set by the county commission and municipal governments. This rate is based on local government services provided and the value of taxable property in the county.

Calculating Your Taxes

Tennessee county tax rates are per $100 of assessed value. For instance, the Anderson County tax rate in 2023 was 2.6289, meaning a homeowner would pay $2.63 for every $100 assessed value.

Let’s say a Tennessee home was appraised at a fair market value of $200,000. The assessment ratio is 25%, which brings the taxable value to $50,000. To calculate the property tax, divide the taxable value by 100 and multiply by 2.62. The result is $1,310 owed in property taxes.

In addition to county real estate taxes, there could be city taxes on the property. You’ll also potentially have school taxes, urban service districts, and other special levies.

How Tennessee Property Taxes Compare

Tennessee’s property taxes are on the more affordable side. Data from 2022 had Tennessee’s average effective property tax rate as 0.67%. The state ranked no. 15 for the lowest property taxes in 2024, with residents paying an average of $1,625. The average US homeowner paid a median $2,690.

Tennessee counties with the highest property taxes based on average effective rate are:

• Shelby County: 1.37%, 3.39 mils
• Montgomery County: 0.93%, 2.99 mils
• Hamilton County: 0.92%, 2.237 mils

Notably, Lake County, with 3.3112 mils, does not appear among the top three. That’s because the average effective rate factors in property values. An area with a low millage rate could have high property fair market values, which means homeowners still pay thousands in taxes. See Hamilton County, with its middle-of-the-road tax rate as an example.

Tennessee counties with the lowest property taxes, also based on average effective rate, are:

• Cumberland County: 0.37%, 1.135 mils
• Fayette County: 0.38%, 1.2915 mils
• Sevier County: 0.40%, 1.48 mils

The lowest millage rates were in McMinn County (1.08230), Gibson County (1.1022), and Cumberland.

Remember, municipalities can also levy real estate taxes in Tennessee. The highest city rate was in White House, Sumner County, at 1.3365 for a total of 3.5885 mils. Believe it or not, Gatlinburg had the lowest city rate at 1.2570 mils for a combined total of 1.6057 mils.

How Often Are Tennessee Property Taxes Paid?

Tennessee property taxes are due on the first Monday of October and become delinquent as of February 28 of the following year. Late payments accrue interest at a rate of typically 1.5% per month. Depending on the county, additional penalties or fees may apply.

Depending on what the local tax assessor allows, you can pay your Tennessee property taxes in person, by mail, or online.

Bring your payment to the county trustee’s office or city hall to pay in person before the February 28 deadline. You can also drop your payment off in the after-hours deposit box, but include the correct paperwork.

If you’re paying by mail, send your check to your county trustee and include your account number on the check. The address will be listed on your Tennessee tax bill.

Some Tennessee counties allow you to pay your property taxes online. Check with your local tax assessor to see if this is an option. You’ll need to set up an account and will likely be charged a convenience fee.

What Are the Tennessee Property Tax Exemptions?

If you’re moving from a state with different property tax exemptions, like a homestead exemption, you’ll be disappointed. Tennessee doesn’t offer any property tax exemptions. On the upside, the property tax burden is lower than in 35 other states.

Tennessee does, however, have a few local option property tax relief programs available that can help ease the burden of property taxes and an appeals process if you feel your assessment is too high.

Tennessee Property Tax Relief Programs

Feel like your taxes are too high? Tennessee offers a few programs to help ease the burden of property taxes.

The Property Tax Relief program offers qualified homeowners a tax break on their homes. It doesn’t exempt the homeowner from paying property tax but can reimburse for some or all the tax bill. It is primarily for low-income elderly and disabled homeowners, as well as disabled veteran homeowners or their surviving spouses.

To learn more about this program and see if you qualify, visit the Tennessee Department of Revenue’s website or see your local county assessor for an application.

Another program is the Property Tax Freeze, a local option for taxpayers 65 years or older. Not all municipalities or counties may have this option available. In this program, the tax base is “frozen” in the base year, which is the year the homeowner applies and is approved for the program. As long as the homeowner continues to meet the requirements, their amount of owed real estate taxes won’t change. Review the list of participating jurisdictions and the complete program requirements.

Tennessee Property Tax Appeals

The first step is to review your Tennessee assessment and compare it to similar properties in your area that have recently sold. Suppose you believe your value assessment is incorrect. In that case, you can file a petition for reassessment with the local county assessor’s office. If you feel your Tennessee property taxes are too high, you can file an appeal with the local county assessor’s office.

You must submit your petition within 30 days of receiving your Tennessee property tax assessment notice. The assessor will then review your case and determine if a change to your assessment is warranted. If they deny your appeal, you can file an appeal with the Tennessee Board of Equalization.

Who Can Help Me Figure Out TN Property Taxes?

If you have questions about Tennessee property taxes, the best place to start is with your local county assessor’s office. They can answer any specific questions you have about the assessment and share how to file an appeal if you believe your taxes are too high. You can also find more general information about Tennessee property taxes on the state’s Comptroller of the Treasury website.

Some municipalities may charge separate city taxes. Check with their city tax department to see how they assess and handle tax payments.

In addition to helping you find the perfect home, your real estate agent may have insights about special tax districts for neighborhoods that interest you. They might also be aware of upcoming millage increases or new special assessments.

Note: This article is for informational purposes only and should not be used as tax advice. Always consult a tax professional for advice.

Updated August 2024