Every four years, Davidson County, Nashville, Tennessee conducts a property value reassessment or reappraisal. This means that those of us living and owning in Davidson County are due for reappraisal in April 2017. In case it was unclear by all the crane activity and break-neck sales pace we’ve seen over the past 5 years, Davidson County is slated to see value increases across the county at record levels. What’s interesting to note is that although there may be an increase in property value, that more valuable property may not see an increase in property taxes. Interesting, right? But how is that possible?
A 2/7/17 Nashville Business Journal article cites, “Under state law, reappraisals must be revenue-neutral for a city as a whole. That means, however, that property owners who see their home values increase by more than the citywide average will pay more in property taxes going forward. Owners who see a lower-than-average increase will pay less in property taxes.” In a nutshell, it depends on exactly where you live in Davidson County and the value increase in relation to the “average” increase.
Davidson County has seen unprecedented growth over the past few years and many homebuyers have purposefully purchased in areas that were on the verge of growth to benefit from lower than average housing prices. Many of those areas will bear the brunt of April’s reassessment and according to NBJ, could see as much as 57% increase in value.
DO NOT panic- a 57% increase in property value does not equal a 57% increase in taxes.
There is an equalization formula used to calculate your property tax amount. This formula is applied to all properties in Davidson County. Our current rate factor is $4.516 per $100 of assessed value. However due to the aforementioned state law to remain income-neutral which also requires the city to collect the same amount of tax as the 2017 year, there will be an automatic readjustment of the tax rate to somewhere between $3.25 and $3.50 per $100 of assessed value. This adjusted rate will be the lowest since 1984 when is was just $3.17 per $100 of AV.
Math jibberish… what does this mean and how does it tie into increased house value, but I’m not paying more in property taxes?
Simplified: if you purchased in an area that experienced record sales and development, Mayor Barry explains in the Tennessean, “The impact, which is going to be a little bit confusing, is that that’s going to be felt more in those neighborhoods that are growing and changing and not the ones that are as established.”
Your new tax bill depends on exactly where you live in Davidson County and your property’s value increase in relation to the “average” increase percentage.
It should be noted that while we will not see an increased rate in property taxes, we will see increased taxes in other areas. Nothing is decided, but there has been discussion of doubling stormwater fees, increasing sales tax or creating taxes for additional city services.
Be sure to read the Tennessean article cited above and watch Assessor Vivian Wilhoite’s video. She gives specific examples of underutilized Metro services to aid and assist in property tax payment. There is a helpful map and additional information about community meetings explaining the reassessment process.
Need additional help understanding how the property tax reassessment affects your property? Please visit the assessor’s website: http://www.padctn.org/ and call me at 615-977-8444 or email @ whereyoulivetn@gmail.com