After the "Great Recession," assessors across Tennessee used the most recent sales data available in their mass appraisal models. As a result, many taxpayers enjoyed several years of undervaluation as their property values appreciated since the economic recovery. Rutherford County's revaluation in 2017 and 2018 reversed that trend.
Counties in Tennessee are required by statute to revalue properties no less frequently than once in a six-year reappraisal cycle. Counties may opt into a more frequent cycle of once every four or five years depending on various factors, such as population, market growth and the counties willingness to fund a more frequent cycle.
The five largest counties are on four-year cycles: Davidson (Nashville), Hamilton (Chattanooga), Knox (Knoxville), Shelby (Memphis) and Rutherford (Murfreesboro). The last reappraisal for four of these five counties was in 2017 (Shelby, Davidson, Knox and Hamilton) and was based primarily on sales data from 2015 and 2016. These four counties will reappraise again in 2021 based on property sales from 2019 and 2020. Rutherford will revalue in 2022 based upon sales values of property in 2020 and 2021.
The Tennessee real estate market has steadily improved over the past few years, and the assessors’ reappraisals in 2021-2022 will reflect this. Many properties that previously enjoyed a low tax burden due to recession-based data saw increases on their assessments during the last revaluation cycle. Current indications do not indicate this will change much in the next revaluation cycle.
To the extent that the tax burden affects the net income of a property, the 2021 reappraisals could slow growth in some sectors of the Tennessee commercial real estate market. Taxpayers should be aware of the market and be prepared. If you don’t know taxes, know your Assessor. They are the ONLY elected official in Tennessee who is bound by oath to insure the tax burden is equally distributed and fair among all taxpayers. This is no small charge indeed and one which carries a heavy burden.