Property Taxes: I Bet You Didn't Know This!

Mar 25, 2021 at 11:00 am by robmtchl


We all must pay property taxes and no virus will get us out of that, but who is going to bear the burden this year? Will it be the owners, the tenants, or the government?

The truthful answer is all.

Local governments rely upon revenue from property taxes

Local governments rely upon property taxes in order to fund the necessary and statutory services for local government to operate. The two components are appraised property values (determined by county assessors) and property tax rates (set by local governments).

While lobbyists are in touch with local and state legislators asking for relief for their wealthy clients who is looking out for the interests of the average citizen? Believe it or not its your local property assessor!

Tennessee's Truth in Taxation Law

There are those who will tell you, incorrectly, that governments revalue property so they can get more money from you and give political cover to those levying the tax rate. That is a misconception. Tennessee’s “Truth in Taxation” law calls for the calculation of a revenue neutral “certified” tax rate following each revaluation cycle. This is to ensure the local government does not have a windfall tax due to the change in property values. Total revenue derived from real property, as a whole, may not be greater than in the prior year on property that was taxed in that prior year.

That does not mean that individual taxes will not change. Some will go down. Some will go up and some will stay about the same. Why is that? That is because the “certified” tax rate is calculated off of a “statistical median” value. If you love math you know that means that is the middle value. So, about a third of the properties will fall on either side of that median.

Tax Burden is Equalized Based on Market Values

Properties are impacted by the tax rate based upon their percentage increase over their prior value. Large expensive properties with high values tend to change as a smaller percentage than an average single-family dwelling. What that means is real language is the tax burden is automatically shifted to where the demand in product is located.

So, what should businesses do for property tax relief? They should encourage revaluations and not waste their money on tax attorneys! Not the truth your tax attorney wants you to understand, is it?

Assessors represent everyone, not just the wealthy

Assessor’s are the only elected official at any level of government, state or local, who is constitutionally charges and oath bound to ensure equity in the tax burden. That is something most people don’t realize. Are our taxes too high? ( I know I don’t enjoy paying mine!) That’s something to take up with your local city county council or county commission. Assessor’s look at equity and fairness in the distribution of the tax burden.

What you as a citizen should know is this. When a large commercial property is successful at lowering (or negating) their fair share of property taxes everyone else must pick up their tab. That isn’t fair, and it isn’t equitable either. Shame on them! And legislators, when a member from the firm says they represent the taxpayers of Tennessee as they ask for favorable tax consideration for their clients; ask them how many single family residential homes under $200,000 dollars they have currently under appeal. 



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