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Nashville Real Estate: Property Taxes

It’s no surprise local homeowners love how hot the Nashville real estate market has become. After all, even those not planning on selling get the benefit of increased property values. Most homeowners welcome the increased equity to their balance sheet. Less welcome are the potential increased taxes that homeowners will have to pay.

What determines property taxes?

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Tennessee uses four things to determine property taxes: appraised value, assessment value, assessment ratio and tax rate. Per the Nashville Government Trustee page, here’s how it breaks down:

The APPRAISED VALUE for each taxable property in a county is determined by the county property assessor.

The ASSESSMENT RATIO for the different classes of property is established by state law (residential and farm @ 25% of appraised value, commercial/industrial @ 40% of appraised value and personalty @ 30% of appraised value).

The ASSESSED VALUE is calculated by multiplying the appraised value by the assessment ratio.

The TAX RATE for Davidson County is set by the Metro Council based on the amount of monies budgeted to fund the provided services. These tax rates vary depending on the level of services provided and the total value of the county’s tax base.

To calculate the tax on your property, assume you have a house with an APPRAISED VALUE of $100,000. The ASSESSED VALUE is $25,000 (25% of $100,000), and the TAX RATE has been set by the Metro Council at $4.516 (Urban Services District) or $3.924 (General Services District) per hundred of assessed value. To figure the tax simply multiply the assessed value ($25,000) by the tax rate of $4.516 or $3.924 per hundred dollars assessed.


What does this mean for Nashville Property taxes?


What’s really going to affect property taxes for Nashville are the appraised values. These are done every four years and Davidson County estimates that home reappraisals may increase around an average of 35% in 2017. Obviously, these increases will vary from neighborhood to neighborhood. So, highly popular areas are likely to see larger increases and may pay more because their appraised value is higher than the county’s average. This also means other areas that see increased home values may still fall under the county’s 35% increase and therefor won’t see an increase in taxes.

Bottom line: most Nashville homeowners can expect an increase. However, Nashville still has lower property tax rates than most other major cities. And while homeowners may be paying more, it’s only because their homes have increased in value, which is a good thing.

Rather get out of Nashville and avoid paying higher taxes altogether? Remember – it’s a fantastic time to sell your home for top dollar. Call DeSelms Real Estate today at 615.550.5565 if you’d like to discuss putting your home on the market!


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