Many clients have asked how property taxes are calculated in our area, so I thought I’d go ahead and post about it.
Quick definition of assessments: Property tax assessments are computerized, county government appraisals of all the homes in their county. These appraisals are actual dollar estimates based on what similar homes have sold for. Property taxes are then based on these estimates.
One caveat: Even though the terms assessment and appraisal are used interchangeably, the term “assessed value” refers to a percentage of the county’s appraised value. For example, in Tennessee, we only pay taxes on 25% of the appraised value, and 25% of the appraised value is called the “assessed value”.
Apparently, in other areas around the country, it’s common for property to be reassessed when a home sales. In other words, when a home sales, the appraised value is simply the most recent sales price. That seems like a pretty simple system. Unfortunately, assessments in our area are a little more confusing.
Our assessments are not based on when a home sales but on a assessment schedule. Williamson County reassesses property every five years, and Maury County reassesses every four years. In both counties, the Tax Assessors office is constantly assessing new construction; in the case of new construction, they will actually inspect and measure the building site. Since they’ve been keeping up with new construction for years and years, they have accurate information on all the homes in the County.
During the period in between reassessment years, the assessor will drive by every property in the county to be sure that nothing has changed. If there have been additions or demolitions, the assessed value can be changed immediately. Of course, most of the homes are the same.
During the reassessment year, the county’s computer program will calculate a new value for every home in the county. The program compares each home in the county to similar homes that have sold recently. Once a property is reassessed, property taxes are based on this new value.
For information about how to calculate your property taxes, please see my post: Spring Hill Property Taxes: How to Calculate.