What is Real Property?
Real property refers to land, buildings, and any permanent structures or improvements attached to the land. In Tennessee, real property is taxed to support local government services such as schools, infrastructure, and public safety. Examples include: homes, commercial buildings, apartment complexes, agricultural structures, vacant land and more. Important Dates January 1st Property is appraised for tax purposes as to the condition of the land and buildings. Property is assessed to the person whose name is on the deed as of January 1. March 15th Deadline for registering Greenbelt application for current tax year (15 acres or more). May 20th Assessment Change Notices will only be mailed to owners who have a value change within the previous year. (This does not apply to the year of reappraisal, when all owners will receive new notices.) June 1st DeKalb County Board of Equalization begins meeting. Appointments must be made by calling 615-597-5925 starting the second week of May. |
Tennessee Code § 67-5-601
general policy (a) The value of all property shall be ascertained from the evidence of its sound, intrinsic and immediate value, for purposes of sale between a willing seller and a willing buyer without consideration of speculative values, and when appropriate, subject to the Agricultural, Forest and Open Space Land Act of 1976, compiled in part 10 of this chapter. (b) It is the legislative intent that no appraisal under this part shall be influenced by inflated values resulting from speculative purchases in particular areas in anticipation of uncertain future real estate markets; but all property of every kind shall be appraised according to its sound, intrinsic and immediate economic value, which shall be ascertained in accordance with such official assessment manuals as may be promulgated and issued by the state division of property assessments and approved by the state board of equalization pursuant to law. (c) (1) The general assembly finds that the increased market value of certain residential property zoned for commercial use has caused an increase in taxes to the extent that citizens are faced with the necessity of selling dwelling houses in which they have lived for many years. The general assembly finds that present use valuation has been extended to others, and is warranted under certain circumstances to relieve the burden of increased taxation to residential owners. (2) It is the policy of this state that the owners of residential property who have lived on that property for a significant period of time should be allowed to continue to live on that property without a disproportionate increase in taxes due to the property being zoned for commercial use. (3) For the purposes of this subsection (c): (A) “Dwelling house” means a residence occupied by the owner of an estate in that property, with such residence being zoned for commercial use, used solely for residential purposes, and occupied by that owner or a person to whom the current owner is a lineal descendant for a period of twenty-five (25) years or more, together with the real estate upon which it is situated up to a maximum five (5) acres; and (B) “Owner” means a citizen and resident of Tennessee who occupies the citizen's or resident's dwelling house, as opposed to occupying any other residence, for at least nine (9) months out of each calendar year. (4) Any owner of a dwelling house may make application to the assessor of property of the county in which the property is located for its classification under this subsection (c). Property that has been determined by the assessor of property to qualify under this subsection (c) shall be valued for ad valorem tax purposes at its market value for residential purposes. The assessment on such property shall include the entire year in which the land is classified under this subsection (c). Any person who is denied such classification shall have the same rights and remedies for appeal and relief as are provided taxpayers for any action of assessors of property. (5) Should the use or ownership of the property change so that it no longer qualifies under this subsection (c), then the property owner shall have the duty of informing the assessor of property. Upon discovering that a property no longer qualifies for classification under this subsection (c), the assessor of property shall reclassify the property and shall value the property according to its current market value for subsequent tax years. In the event such change in use or ownership does not timely come to the attention of the assessor of property, and upon the assessor discovering that the property no longer qualifies, such reclassification shall affect each year that the property has failed to qualify, and the taxpayer shall be liable for the difference in taxes, including penalty and interest. (6) It is the legislative intent that the twenty-five-year time period is an integral part of this subsection (c). If this provision is held by a court of competent jurisdiction to be an unreasonable classification or otherwise declared unconstitutional, then this entire subsection (c) shall be null and void. (7) The unmarried spouse of a deceased owner, occupying the dwelling house as a surviving joint tenant or tenant by the entireties, may continue to reside in the dwelling house without disqualifying the property from the benefits of this subsection (c). The term of occupancy by that spouse shall not be deemed to interrupt the twenty-five-year time period required for continued eligibility of the property for the benefits of this subsection (c). (d) The general assembly finds that due to the abundance of limestone, sand and gravel in this state and the difficulty in valuing the contributory interest in limestone, sand and gravel that such contributory interest in limestone, sand and gravel shall be deemed to have no value for property tax purposes. This does not affect the commercial classification of real property used for quarry purposes. (e) (1) The general assembly finds that any property that generates electricity using green sources such as geothermal, hydrogen, solar or wind, is generally capable of producing less electricity than conventional sources due to uncertain or intermittent energy sources or other factors, that net operating income will be affected by unusual cost and market conditions, and that the commercially competitive disadvantage of these green energy source properties evidences that their sound, intrinsic and immediate value is significantly less than their total installed costs. The general assembly further finds that unless these circumstances are considered in the determination of value for tax purposes under this chapter, investment in property to generate electricity from green sources will be unreasonably discouraged, denying the citizens of Tennessee the environmental benefits associated with the greater use of these domestic renewable energy sources for power generation. (2) Based on the foregoing findings, the sound, intrinsic and immediate value of green energy source property should not initially exceed a percentage of total installed costs equal to the ratio of projected electricity output over a period of one (1) year to the maximum capacity of the property, as follows: (A) The sound, intrinsic and immediate value of wind source property should not initially exceed one-third (⅓) of total installed costs; (B) The sound, intrinsic and immediate value of solar source property should not initially exceed twelve and one-half percent (12.5%) of total installed costs; and (C) The sound, intrinsic and immediate value of other green source property should not initially exceed its appropriate capacity factor as determined by the state board of equalization in consultation with the department of environment and conservation. (3) The assessor of property, or the comptroller of the treasury, in the case of public utility property, shall take the foregoing findings into account in determining the sound, intrinsic and immediate value of green source property when the property is initially appraised and each time the property is reappraised. A copy of the green energy production facility certification issued by the department of environment and conservation, or filing of a schedule or statement pursuant to § 67-5-1303, effective as of January 1 of the year for which valuation under this subsection (e) is claimed, shall be required and shall be provided by the property owner to the comptroller's office by March 1 of the first year for which valuation under this subsection (e) is claimed. The department of environment and conservation shall report each month to the comptroller of the treasury a listing of certifications approved in the preceding month, and shall provide copies of certification records to the comptroller of the treasury on request. On or before the scheduled reappraisal in each county, the comptroller of the treasury shall advise the assessor of known locations of certified or other green energy property and whether the property is assessable locally or centrally. (f) The general assembly finds that any public utility property or commercial and industrial property that is used to engage in the fueling of natural gas vehicles and that is a certified alternative fueling site as described in the definition of “certified green energy production facility” in § 67-4-2004, is generally capable of fueling fewer types of vehicles due to limited availability from original equipment manufacturers, that use of such alternative, domestically produced transportation fuels should be encouraged to improve air quality and to enhance our nation's energy security, and immediate economic value for all purposes under this chapter should not initially exceed thirty percent (30%) of its total installed costs. The general assembly further finds that, unless the findings are considered in the determination of the sound, intrinsic, and immediate economic value of such property for all purposes under this chapter, investment in property for fueling alternative fuel vehicles will be unreasonably discouraged, denying the citizens of this state the environmental benefits and domestic energy security associated with the use of natural gas as a transportation fuel. The assessor of property, in assessing any such commercial and industrial property, or the comptroller of the treasury, in assessing any such public utility property, that engages in the fueling of motor vehicles with natural gas, shall take these findings by the general assembly into account in determining the sound, intrinsic, and immediate economic value of such property, when the property is initially appraised and each time the property is reappraised. A copy of the facility certification issued by the department of environment and conservation shall be required in order to qualify for such valuation. The valuation of personal property under this section shall also apply to machinery and equipment utilized in a natural gas vehicle fueling station. Such equipment shall include, but not be limited to, storage vessels, compressors, dryers, dispensers, piping, compressed or liquefied gas appliances, or any other item that is installed by a natural gas provider. Tennessee Code § 67-5-602
Factors for consideration (a) Except as provided in § 67-5-601(c), in determining the value of all property of every kind, the assessor shall be guided by, and follow the instructions of, the appropriate assessment manuals issued by the division of property assessments and approved by the state board of equalization. In the preparation of the manual, the division of property assessments and the state board of equalization shall consult with the United States forest service and the state forester in establishing the guidelines to be used in determining the value of forestland. (b) For determining the value of real property, such manuals shall provide for consideration of the following factors: (1) Location; (2) Current use; (3) Whether income bearing or non-income bearing; (4) Zoning restrictions on use; (5) Legal restrictions on use; (6) Availability of water, electricity, gas, sewers, street lighting, and other municipal services; (7) Inundated wetlands; (8) Natural productivity of the soil, except that the value of growing crops shall not be added to the value of the land. As used in this subdivision (b)(8), “crops” includes trees; and (9) All other factors and evidence of value generally recognized by appraisers as bearing on the sound, intrinsic and immediate economic value at the time of assessment. (c) (1) For determining the value of industrial, commercial, farm machinery and other personal property, such manuals shall provide for consideration of the following factors: (A) Current use; (B) Depreciated value; (C) Actual value after allowance for obsolescence; and (D) All other factors and evidence of value generally recognized by appraisers as bearing on the sound, intrinsic and immediate economic value at the time of assessment. (2) Notwithstanding the foregoing, all farm personal property and also all household and kitchen furniture, tableware, musical instruments, wearing apparel, private passenger motor vehicles, jewelry and other personal property of similar character used in the taxpayer's own household, together with all intangible property, including bank accounts, of the taxpayer, may be assumed prima facie by the assessor of property to be of a value not in excess of seven thousand five hundred dollars ($7,500) per individual and fifteen thousand dollars ($15,000) for jointly owned property held by husband and wife in the absence of any tax return or schedule to the contrary. Tennessee Code § 67-5-1601
general provisions (a) (1) Reappraisal shall be accomplished in each county by a continuous six-year cycle comprised of an on-site review or photo of each parcel of real property over a five-year period, or, upon approval of the state board of equalization, by a continuous four-year cycle comprised of an on-site review or photo of each parcel of real property over a three-year period, followed by revaluation of all such property in the year following completion of the review period. Alternatively, if approved by the assessor and adopted by a majority vote of the county legislative body, the reappraisal program may be completed by a continuous five-year cycle comprised of an on-site review or photo of each parcel of real property over a four-year period followed by revaluation of all such property in the year following completion of the review period. The board may consider a plan submitted by an assessor which would have the effect of maintaining real property values at full value as defined by law on a schedule at least as frequent as outlined in this section. In counties which have adopted a four-year or five-year reappraisal cycle, there shall be no updating or indexing of values as there is in counties with a six-year cycle. (2) In the third year of a six-year reappraisal cycle, there shall be an updating of all real property values if the overall level of appraisal for the jurisdiction is less than ninety percent (90%) of fair market value. If the overall level of appraisal for the jurisdiction is greater than or equal to ninety percent (90%) of fair market value, any subclass of property not having a level of appraisal within ten percent (10%) of the overall level of appraisal for the jurisdiction shall be updated to the overall level of appraisal. Further, any group of property within a subclass not having a level of appraisal within ten percent (10%) of the level of appraisal for that subclass shall be updated to the level of appraisal for that subclass. If land market values of farm property in the county are not updated, land use values for land classified as agricultural, forest and open space pursuant to chapter 5, part 10 of this title will not be updated. When values are updated, the factors or appraisal table changes used to effect the update shall be as determined by the state board of equalization. (3) The board may approve a reappraisal plan specifying a schedule for continuous on-site review or photo review that is different than the standard schedule provided in subdivision (a)(1), but that is no longer than four (4) years. The board shall consider a plan submitted by an assessor which would have the effect of maintaining real property values at full value as defined by law on a schedule at least as frequent as outlined in this subsection (a), and if the board finds the plan would achieve this effect, the plan shall be implemented with or without indexing. During the review cycle between revaluations, new improvements discovered by on-site review or photo or otherwise shall be valued on the same basis as similar improvements were valued during the last revaluation or otherwise as necessary to achieve equalization of such values, subject to application of periodic value indexes established by the board. (4) The assessor of property shall maintain a program of real property sales verification in accordance with procedures and rules established by the state board of equalization. The assessor of property shall maintain documentation of the reason for rejection of any sale rejected by the assessor for use in analyzing appraisals. (5) Photo review of parcels as part of reappraisal is permitted only in compliance with rules adopted by the state board of equalization. (b) (1) (A) Subject to funding, the state shall pay a per-parcel grant to local governments to assist in the cost of reappraisal. The grant shall be determined by the division of property assessments and approved by the board. Such funds shall be expended solely for the purpose for which the grant was made. (B) The state grant for any county in a four-year or five-year reappraisal program shall be limited to the amount, as determined by the division of property assessments, which would have been paid to the county had it remained on a six-year reappraisal program. (2) In the absence of any agreement between the county and the cities thereof imposing a property tax, local costs of reappraisal of properties within a city shall be paid one-half (½) by the county and one-half (½) by the city. Any city paying one-half (½) of local costs of reappraisal pursuant to this section shall pay those costs directly to the county government with jurisdiction over the property being reappraised, and shall pay those costs during the fiscal year in which the reappraisal is finalized. (3) The assessor of property shall submit such plans and reports for reappraisal as the board shall require. The board, with the assistance of the division of property assessments, has the power to approve, modify or disapprove any proposed plan submitted by the assessor of property, including the power to specify or approve any proposed computer assisted appraisal system pursuant to minimum standards which the board shall adopt in considering a proposed system. All work is subject to the supervision and approval of the director of property assessments. (4) Where the on-site review is undertaken by the county assessor of property and the county assessor's staff or a professional firm is employed to carry out this work, the division shall monitor the on-site review conducted by the county or the professional firm. (c) (1) The assessor of property of each county shall prepare a plan for carrying out the requirements of this section and §§ 67-5-1602 — 67-5-1604, in the assessor's taxing jurisdiction, such plan to be submitted to the county mayor and the county legislative body for review in such form, manner and time as shall be determined by the board. (2) At such time as shall be determined by the board, the assessor shall submit the plan and any pertinent resolution of the county legislative body stating its approval or disapproval to the board for the board's approval or other action. (3) Prior to the execution of any contract for reappraisal, the county legislative body shall make appropriate arrangements to finance such contract. (d) Whenever the classification or assessed value of property is changed as a result of reappraisal, the property owner shall be entitled to notice of such change as otherwise provided by law at least ten (10) calendar days before the local board of equalization commences its annual session and, in addition, shall be given the opportunity to appear at an informal hearing on a day or days scheduled for such hearings. Written notice of any action taken as a result of such hearings shall be sent at least ten (10) days prior to the county board adjournment. (e) Upon a finding by the division that the assessor of property or the county is unable or unwilling to comply with the requirements under this part, including submission of any necessary plan of compliance required by the board, the director of the division shall report such finding to the board. The board shall notify the assessor of property and the county mayor of the nature of the noncompliance and shall indicate the action required to correct such noncompliance. Failure on the part of the assessor or the county to comply within forty-five (45) days of such notification shall result in the withholding of any or all of the state grant for reappraisal scheduled to be received by the county according to this part until such deficiency is corrected. If satisfactory action is not taken by the assessor or the county to correct the noncompliance within forty-five (45) days from the date that funds are withheld, the board shall direct the division, and the division shall thereupon be authorized to take such steps as are necessary to ensure compliance with the requirements of this part, and the county found in noncompliance shall reimburse the state for all costs incurred by the state pursuant to this action. If such costs are not reimbursed to the state within ninety (90) days of the date of an invoice for such costs, the state may recover its costs through the deduction of such costs from any state-shared taxes as identified in § 4-31-105, otherwise due the county. (f) The initial schedule of review and revaluation under this section shall be as determined by the board. The board may specify a four-, five- or six-year cycle for the initial scheduling of review and revaluation under this section; provided, that approval of the county legislative body shall be required to move a mid-cycle updating of values from an existing reappraisal plan, and any revised plan longer than five (5) years shall include a mid-cycle updating of values pursuant to subsection (a). (g) (1) There shall also be an updating of the localized and nonoperating real property of public utilities and modern market telecommunications providers in each county, and such must be accomplished in the same year as other locally assessed properties. (2) All assessing and updating of operating properties of public utility companies and modern market telecommunications providers must be done by the comptroller of the treasury in accordance with part 13 of this chapter. (3) All expenses for assessing and updating of operating properties of public utilities and modern market telecommunications providers must be paid by the comptroller of the treasury. (h) As part of any reappraisal program conducted pursuant to this part, the assessor of property of each county shall identify all cemeteries having historic value as determined by the county historian and the cemetery advisory committee. Every cemetery having one (1) or more tombstones shall be indicated on the tax maps by an appropriate symbol prescribed by the state board of equalization. Any cemetery which is not less than one-fourth (¼) of an acre shall be identified as a separate parcel and contain the appropriate symbol. |
