The beautiful city of Knoxville, Tennessee has become one of the most popular cities in the country for homebuyers. Young families, retirees, and those that appreciate the glory of an outdoor lifestyle are heading to the Smoky Mountain region of Knox County to find a home.
One of the most important factors in the consideration of buying a new home is property taxes. Knowing what the rates are and how much it will cost annually to move to a new town has become a determining factor for many potential homebuyers. Knoxville has much to offer and is one of the most affordable places to settle in terms of property tax rates.
The growth of Knoxville has a slow but steady pace. The home price index has increased consistently over the past two years with no indication of change from the county assessor. As more people discover all that Knoxville has to offer, they are making the move to this vital city.
One of the largest draws to Knoxville is the affordable cost of living. On average, the cost of living is 11% lower than the national average making it an attractive place to settle, especially for young families.
In this article, we will focus on the exploration of Knoxville property taxes, how to pay them, how they rate against the rest of the state, and what happens during the sale of a home. Let’s take a closer look at everything you need to know about Knoxville, Tennessee property taxes.
Property Taxes in Knoxville
One of the largest draws of Tennessee is affordable housing. The median cost of a home in Knoxville, Tennessee is $250,000 which is nearly 66% less than the national average. For young families, those that are downsizing, and retirees, those prices are an attractive draw to the area.
The city of Knoxville property tax is calculated for each $100 of assessed value on a property, as determined by the Property Assessor’s Office. With the national average property tax being over $2,800, residents of Knoxville can expect to pay less than half that amount with an average of $1,145 tax bill.
Whether you are selling or buying a house in Knoxville, it’s important to understand your property tax responsibilities. Knoxville residents pay both city and county tax. The current Knoxville property tax rate for the city is $2.46 per $100 assessed property value. The Knox County property tax rate in 2021 is $2.12 per $100 assessed property value.
While these prices are very reasonable compared to the rest of the country, it’s important to understand the added expense that your property taxes will add to your overall mortgage costs. To find out your potential property taxes you can visit your county property lookup online and complete a property tax search. Visit www.knoxcounty.org for tax information.
Since 2016, Knox county property assessors have ranked third amongst the five largest cities in Tennessee. While the numbers are comparable only on the amount of Knoxville property tax rates, they do not include factors including the costs of living, property assessment rates, or available services.
What Do These Property Taxes Cover?
It’s not unusual for homeowners to complain about the amount of their state of Tennessee property taxes. However, most don’t often consider all of the services and community benefits that are funded by these payments on your personal property.
While it’s acceptable to want a lower tax bill, none of us wants to give up the services that are available due to that funding. Property taxes are pooled by the local governments and paid out to maintain many public services including schools, municipal infrastructure, road maintenance, and public safety.
- Funding for the public schools in Knoxville, Tennessee accounts for nearly 50% of the tax bill. In larger cities with a higher student population, the percentage can be much higher. Property taxes are used to build new facilities, educational materials, and school board staff salaries.
Public Roads and Parks
- The maintenance of roads and public parks are funded by property tax collection. All repairs, expansions, and maintenance for public roads and parks are reliant on the payment of property taxes.
- It takes a lot of work to keep the services for a city the size of Knoxville TN running and these are paid for by your property taxes. Municipal administration costs include salaries for local government employees and Municipal buildings.
- A large portion of the budget for local police forces is funded through the collection of property taxes.
How to Pay Property Taxes in Knoxville, Tennessee
Whether you are buying or selling a home in Knoxville, you will have to deal with the payment of property taxes. You may use an agent or consider hiring a property manager if you are investing in a rental property that will take care of your property tax management. However, it is the responsibility of both the buyer and the seller to ensure that the owing taxes are paid on a property.
The seller of a property will need to pay the owing balance of property taxes to the date of sale. The buyer will need to arrange payment for the remaining tax amount for the year. Most property owners integrate their tax payments directly into their mortgage payments. If you are selling privately to one of many companies that buy houses in Knoxville, they will likely make arrangements to ensure that your tax burden is paid before the sale is closed.
Knoxville, Tennessee property taxes are generally paid out of an escrow account on the property. You are likely already making your payment as part of your mortgage. Take a look at your mortgage statement to see the property tax listing in your calculations.
Knoxville property taxes are due the first Monday in October annually. To avoid paying interest penalties, the balance of property taxes must be paid in full by the last day of the tax year, which is February in the following calendar year. Delinquent property tax payments will be charged 18% interest on their principal amount annually. If you pay the full amount of your Knoxville property taxes prior to October 31st, you will receive a 1% discount on your balance.
The City of Knoxville and Knox County Trustee will accept payments for property tax payments by personal check or money order. You can also make online payments with a credit or a debit card. Property taxes can be paid by mail to P.O. Box 15001, Knoxville, TN 37901-5001, or in person at the Property Tax office in downtown Knoxville at 400 Main Street.
Do You Have to Pay Property Taxes in Knoxville, Tennessee?
If you own a home or a property in Knoxville, Tennessee you are legally obligated to pay a property tax to the city and the county. While property tax bills can be a significant hardship to some homeowners, there are some exceptions that can help you to avoid your property tax burden.
Each state has different rules about property tax exemptions in the same way as there are rules about how to avoid capital gains tax payments. In general, there are exemptions for seniors, military veterans, disabled citizens, and homesteaders.
The details of property tax exemptions change annually as reviews of social security payments and property reappraisal fluctuate. There may be various eligibility requirements based on income and property status. Check with your financial advisor to find out if you qualify for a property tax exemption.
Fines for Not Paying Property Taxes in Knoxville
To remain in compliance with your property taxes it’s important to understand who is responsible for what taxes in the event of a home sale. Whether you are using an investment firm that advertises, “We buy houses Tennessee”, or are using a real estate agent, you need to understand what is at stake with your property taxes.
When a home is sold, the seller will be responsible for paying the portion of property taxes in addition to the standard real estate taxes that they owe for the months that they occupied the home during the calendar year. The buyer will pay the remaining Knoxville property tax for the months remaining in the year.
If you fall behind on your Knoxville property taxes, you could potentially lose your home. Every person who owns the property, whether it has a home on it or not, owes property taxes to the city or county. The government uses this property tax collection to pay for critical public services including schools, road maintenance, and public safety services.
When you don’t pay your property taxes, the amount owing becomes a lien on your property. This essentially results in your home being collateral for the debt. If you refuse to pay the debt, your home could be sold off in a tax sale by the municipal government.
As a homeowner, you will be given several opportunities to pay your delinquent tax bill before a sale takes place. It is in your best interest to include your property tax payment in your mortgage payment so that you are always up to date. If you are trying to sell your home, companies that offer to, “Buy my house Nashville”, or Knoxville will need to ensure that the tax bill is up to date before they will make you an offer.
While homeowners may resent their monthly property tax bill, it’s important to keep in mind that the amount that you pay is responsible for helping to maintain the essential services on which you and your family rely. If you are thinking about relocating to Knoxville, Tennessee, you now have a greater understanding of your taxation responsibilities and some of the benefits of moving to the gateway to the Smoky Mountains.