Real Estate

Tennessee Property Tax Rates by County

By Tom Burchnell
tennessee property tax

Property tax is part and parcel of homeownership. The concept is relatively simple – you pay a tax that depends on the value of your home and the money goes toward funding municipal services, such as schools and police departments. Rates vary by county and state, but Tennessee property tax rates are some of the lowest in the country.

National vs Tennessee Property Tax Rates

In 2022 WalletHub rated Tennessee property tax rate to be the 15th lowest of all 50 states. Tennessee homeowners paid an average of 0.71 percent of their homes’ value.  With the statewide average for home values being around $167,200, that works out to about $1,190 per taxable property. This is under half of the US average, which the national Census Bureau has reported as $2,471.

How Is Tennessee Property Tax Calculated?

The Tennessee property tax rate depends on three factors:

  1. The property’s appraised value as determined by the county assessor 
  2. Its assessment ratio, currently set at 25 percent for residential and farm properties
  3. The tax rate for the county in which the property is located 

Each county has a commission that sets its property tax rate. To settle on a number, commissioners consider the overall value of property in the county as well as the extent of services provided.

Using these numbers, you can calculate your Tennessee property tax rate. First, multiply its current appraised value by 25 percent (assuming your property is classified as residential or farm). The result is known as the assessed value. Then, multiply that number by your county’s tax rate.

Researching Tax Rates

To calculate your estimated property tax, you’ll need to determine whether your county has a single tax rate or whether its current tax rate varies by municipality and district. Your property tax rate calculation will be more complicated if you live in a county like Davidson, which imposes taxes for a wider variety of services in its Urban Service District than those in the broader General Service District (GSD).

Many Tennessee counties, including Davidson and Shelby, offer detailed information about taxation methods on their property assessors’ websites. These websites often feature property tax calculators that allow homeowners to enter their locations, classifications, and appraised value to receive a tax estimate.

Tennessee Property Taxes by County

So what are property taxes in Tennessee by county? You can review TN property taxes by county and find out how your tax bill compares to what you would be paying in other locations.

Statewide, the lowest taxes are in:

  1. Pickett County: 0.37% average tax rate, $559 median annual taxes
  2. Cumberland County: 0.38% average tax rate, $548 median annual taxes 
  3. Fayette County: 0.40% average tax rate, $773 median annual taxes 
  4. Sevier County: 0.41% average tax rate, $685 median annual taxes 
  5. Fentress County: 0.44% average tax rate, $443 median annual taxes
  6. DeKalb County: 0.44% average tax rate, $601 median annual taxes

The highest are in:

  1. Shelby County: 1.42% average tax rate, $2,026 median annual taxes 
  2. Gibson County: 0.90% average tax rate, $855 median annual taxes
  3. Hamilton County: 0.89% average tax rate, $1,522 median annual taxes 
  4. Coffee County: 0.87% average tax rate, $1,107 median annual taxes 
  5. Davidson County: 0.82% average tax rate, $1,799 median annual taxes

As you can see, a higher annual tax percentage doesn’t necessarily correlate with a higher tax bill.    

For instance, in Hamilton County, the higher median home values mean that the average taxpayer owes more than the average taxpayer in Gibson County, the latter’s current tax rate is 0.01 percentage points above the former. Homeowners in DeKalb and Fentress Counties have the same average tax rate, but higher home values in DeKalb County mean that the typical property owner there pays more than his or her counterpart in Fentress.

Tennessee Property Taxes – What Makes Us Special?

Unless you’re in Shelby County, you pay below the national average in property taxes. But you’re also paying less than you would in nearby states with similar home values. Missouri and Georgia, both of which have comparable median home prices, have effective property tax rates of 1 percent and 0.93 percent higher than Tennessee.    

Having a lower tax rate than the neighbors can be a blessing, but it can also be a double-edged sword. It means that your taxes are as affordable as they can be, but it also means that you’re less likely to find lower taxes nearby. If you are having trouble affording your property taxes, this can become a significant problem.

Can’t Afford Tennessee Property Tax?

Ideally, the commensurate value model means that everyone’s tax is affordable and aligned with their means, but it doesn’t always work that way. Personal finances can change while property values stay the same. If you run into hard times, your county will still calculate your property tax based on your home’s worth.

The Good News – You Have Options

In the past, if you couldn’t afford your property taxes, you’d have to take out a second mortgage or move. Both of these options are difficult and costly, especially if you’re already having money troubles. And when you already pay some of the lowest property taxes in the area, you face having to move far away, which can cause a whole host of other problems, from the need for a new job to the struggles that come with being farther from family.

Try a Sale-Leaseback Solution

Now, however, a Tennessee property owner can turn to a sale-leaseback solution for help. Through this unique initiative, a company can buy your home and then lease it back to you. You receive the equity you’ve built up and no longer have to pay property taxes, but you don’t have to move either.   

sale-leaseback agreement gives you the right to remain in your home as long as you’d like, provided that you abide by the terms of the lease. The contract ends when you decide to put the home on the market and relocate or, if your sale-leaseback company offers it, buy it back.

Relief Is in Sight

It’s easy to start worrying when you can’t afford your Tennessee property tax. Financial difficulties are challenging enough. When you add having to uproot your family into the mix, you pile emotional distress on top of stress.

Key Takeaways

A sale-leaseback can help you find relief from Tennessee property tax payments. Talk to a financial advisor to learn more about Tenessee property taxes and your options. Check out other guides explaining Texas property tax, South Carolina property tax, and more!

Property Tax
Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

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