Your Guide to Property Tax in Tennessee

As a homeowner in Tennessee, you’re probably aware of the property taxes you pay each year. But did you know that some exemptions are available that can reduce your tax bill? 

In this guide, we will explain everything you need to know about property taxes in Nashville and the exemptions available to homeowners. We will also provide information on how to file for an exemption and what kind of documentation you will need. 

So whether you’re a first-time homeowner or just looking to save a little money on your tax bill, this guide is for you!

Property Taxes in Tennessee  

A property’s assessed value is based on the dollar value assigned to a home or other piece of real estate for property tax purposes. It takes into consideration comparable home sales, location, and other factors. The assessed value is not the same as fair market value (what the property could sell for) but is often based on a percentage of it.

A property’s assessed value is typically 25% of the appraised value. However, there are several exemptions available that can reduce this percentage. The most common exemption is the homestead exemption, which reduces the assessed value or appraised value to 18%. 

>>Besides property taxes, find out more things to know before moving to Nashville! 

Property Tax Calculator 

To calculate your property taxes in TN, four components are considered:

1. Appraised Value
2. Assessment Ratio
3. Assessed Value
4. Tax Rate

The tax bill for a typical homeowner in Nashville averages $1800 per year. However, this amount can vary depending on the municipality in which you live. 

• The median property tax in Tennessee is $878.00 per year for a home worth the median value of $137,300.00. Counties in Tennessee collect an average of 0.64% of a property’s assessed fair market value as property tax per year.

• The median property tax in Davidson County, Tennessee, is $1,587 per year for a home worth the median value of $164,700. Davidson County collects, on average, 0.96% of a property’s assessed fair market value as property tax.
• The median property tax in Shelby County, Tennessee is $1,872 per year for a home worth the median value of $135,300. Shelby County collects, on average, 1.38% of a property’s assessed fair market value as property tax.
• The median property tax in Knox County, Tennessee is $1,091 per year for a home worth the median value of $152,300. Knox County collects, on average, 0.72% of a property’s assessed fair market value as property tax.
• The median property tax in Hamilton County, Tennessee is $1,270 per year for a home worth the median value of $147,200. Hamilton County collects, on average, 0.86% of a property’s assessed fair market value as property tax.

Tennessee has one of the lowest median property tax rates in the United States, with only nine states collecting a lower median property tax than Tennessee.

>>Want to find out how much your property taxes might cost in TN? Check out this Tennessee Property Tax Calculator for help. 

When Are Property Taxes Due?

Property taxes in Nashville are usually paid in two installments. The first installment is due on October 1st, and the second installment is due on February 1st. However, you may also choose to pay your taxes in one lump sum, like annual taxes. 

Property Owners are to make tax payments out to a P.O. Box mailing address.

If you are unable to pay your property taxes, you may be eligible for a payment plan. Contact the Davidson County Property Assessor’s Office for more tax information and state law details on real property. 

Property Tax Exemptions

There are several exemptions available to homeowners in Tennessee. The most common exemptions are for veterans, disabled persons, and the elderly. However, there is a homestead exemption as well. In order to qualify for an exemption, you must file an application with your local county. Contact your county trustee to apply. 

The following documentation is required: 

• A copy of your most recent tax bill 
• A copy of your driver’s license or state ID 
• Proof of residency (a lease agreement, mortgage statement, or utility bill) 
• Proof of disability (if applicable) 
• Proof of age (if 65 or older) 

In order to file for an exemption, you will need to provide documentation proving that you are the homeowner of the property. This can include a copy of your deed, mortgage statement, or utility bill. You can find more information about filing for an exemption on the Davidson County Property Assessor’s website. 

Property tax is an important part of homeownership, owning personal property, or a small business. By understanding the process and knowing which exemptions are available to you (the taxpayer), you can save money on your tax bill. If you have any questions, don’t hesitate to contact the Davidson County Property Assessor’s Office.

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Homestead Exemption

The homestead exemption is one of the most common exemptions available to homeowners in Tennessee. It reduces the assessed value of the property by 18%. In order to qualify for the exemption, you must file an application with your local county’s office. 

The following documentation is required: 

• A copy of your most recent property tax bill
• A copy of your deed or mortgage statement
• A copy of your driver’s license or state identification card

The homestead exemption in Tennessee applies to owner-occupied homes and can reduce the amount of property taxes by up to $5,000. To qualify for the exemption, you must own the home, and it must be your primary residence. You must also file an application with your local county tax office.

>>What about capital gains taxes? Find out how to avoid capital gains tax!

Property Tax Exemptions for Seniors and Disabled People

The state of Tennessee determines the property tax exemptions for seniors and disabled people. The exemption amount is based on the assessed value of the property and the age or disability of the owner. The exemption can be claimed by the owner or the owner’s spouse. 

To qualify for the exemption, the property must be the primary residence of the owner or the spouse. The exemption cannot exceed $25,000 per year. The claim forms are available from the Assessor’s Office or on the Tennessee Department of Revenue website.

The deadline to file for the exemption is April 15. However, the claim form must be filed every year, even if there has been no change in ownership or use of the property.

For more information about the property tax exemptions for seniors and disabled people, visit the website of the Tennessee Comptroller Of The Treasury. 

Property Tax Exemption for Disabled Veterans

First and foremost, if you’re a disabled veteran, we want to say thank you for your service. 

Property tax exemption for disabled veterans is a vital part of the tax system in Tennessee. The exemption allows qualifying veterans to subtract a percentage of the value of their home from the amount of property tax they owe each year. This can be a huge property tax relief for disabled veterans who are struggling to make ends meet, as it can lower their tax bill by hundreds or even thousands of dollars.

In order to qualify for the exemption, a veteran must be certified as 100% disabled by the United States Department of Veterans Affairs. The veteran must also own and live in the home that is being taxed. In addition, the home must be the veteran’s primary residence – they cannot own multiple homes and claim this exemption on each one.

The amount of the exemption varies depending on the value of the home and the veteran’s disability rating. For homes worth $100,000 or less, the exemption is 100% of the property tax bill. For homes worth more than $100,000, the exemption decreases in proportion to the value of the home. So a veteran with a 100% disability rating who owns a home worth $200,000 would be exempt from paying property tax on $20,000 of the value of their home.

This exemption is available to all qualifying veterans in Tennessee, regardless of when they served or where they live. It’s one way that the state shows its appreciation for the sacrifices made by our servicemen and women. So if you’re a disabled veteran who owns a home in Tennessee, be sure to take advantage of this exemption and lower your property tax bill today.

If you have any questions about the property tax exemption for disabled veterans in Tennessee, or if you need help applying for the exemption, you’ll want to visit the Tennessee Department of Veteran Services. 

What Happens If You Don’t Pay Your Property Taxes?

If you don’t pay your property taxes, the county tax office can place a lien on your home for delinquent taxes. This means that you will be unable to sell your home or borrow money against it until the taxes are paid. The county commission can also seize and sell your home to pay the taxes. In addition, you will be responsible for all the costs associated with the sale, including legal fees, advertising costs, and commissions.

So if you’re having trouble paying your property taxes, it’s important to contact the county tax office as soon as possible to make arrangements. Your local government may be able to work out a payment plan or offer other assistance. 

Another option to consider would be to sell your home. Of course, you’ll still have taxes when selling real estate that will need to be paid, but the amount will be prorated. But if you can’t afford the property taxes, you may be better off selling the home and using the money to pay off the tax debt. This will allow you to avoid a tax lien and keep your credit intact.

Of course, no one wants to have to sell their home. But if you’re facing financial difficulties, it’s important to explore all your options. And if you need help, one of the top companies that buy houses in Nashville is here to assist you! Nexus Homebuyers can provide guidance and help you sell your house fast if you’re going through a difficult time.

We buy houses in Tennessee; we also buy houses in as-is condition meaning no repairs, updates, or cleaning is necessary on your part. We are cash home buyers in Knoxville that can make you a cash offer for your home within 24 hours and can close as quickly as seven days after you accept our offer. So if you’re behind on property taxes and need to sell your house fast, contact us today! We would be happy to help you explore all your options and find the best solution for your situation.

Final Takeaways

Owning a home can be expensive, especially when you have to pay property taxes. Sometimes the tax exemptions can be helpful, but if you don’t qualify for any of them, you can still try to negotiate a payment plan with your local county tax office.

Another solution if you’re struggling to make ends meet, you consider selling your home and moving to a less expensive place. This could reduce your property tax bill and make it more affordable for you to keep your home.

So if you’re having trouble making your monthly payments, selling your home might be a solution. 

Don’t wait until it’s too late – if you’re having trouble paying your property taxes, contact us today!

DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. Nexus Homebuyers always encourages you to reach out to an advisor regarding your own situation.