You Don't Have To Take That Property Assessment Sitting Down
By Anthony Sanders, JD This spring in Nashville and over much of Tennessee, government workers are finalizing one of the most ominous acts in the life of a homeowner: property assessment. This assessment sets the amount of property tax owed by each individual homeowner. This spring in Nashville and over much of Tennessee, government workers are finalizing one of the most ominous acts in the life of a homeowner: property assessment. This assessment sets the amount of property tax owed by each individual homeowner. The system is neither reliable, nor is it based on a homeowner’s ability to pay. Luckily, there are ways for homeowners to challenge unfair assessments. City and county governments calculate property taxes based on 25% of the estimated or ”appraised” value of the property’s worth on the open market. This amount is the ”assessment.” County authorities assess properties every three, four or five years in Tennessee. The government then independently sets a rate at which to tax property per $100 worth of assessed value. Thus, if the government appraises a homeowner’s property at $200,000 — an assessment of $50,000 — and the tax rate is one dollar per thousand, then the homeowner owes $500. There are two problems with this otherwise sensible system. One is that homeowners may live in a house for years, paying tens of thousands less for their house than it is now worth. Even if the assessment reflects the property’s accurate market value, rapidly rising housing prices in some areas often result in much higher taxes than just five or 10 years earlier. This increase does not even reflect any property tax rate increases ordered by city or county governments. An even more troubling problem with the property tax system, however, is that assessments are often plain wrong. Since homes do not come with self-adjusting price tags on their front lawns, assessors must use a variety of criteria to estimate the value of property. These criteria include the price for which surrounding houses have recently sold and the age, size and condition of buildings on the property, These assessed values are often quite different from what a home would actually sell for. This is unsurprising since the procedure for assessing the value of property relies on an individual assessor’s interpretation of the ”correct” price of a given home. Assessors often possess incorrect information about the property. In one example, a Pennsylvania assessor valued a man’s 12-foot-wide trailer home wildly out of proportion to its actual worth. The reason? The authorities thought the tiny trailer was a doublewide. That man challenged his assessment and had it reduced. So can you. Every homeowner in Tennessee has the right to challenge his or her assessment. However, you cannot challenge your assessment just because the property taxes you must pay are excessive. You can challenge only if you think the assessed value is incorrect. It is particularly important that Nashville residents ensure that assessors value property accurately since Metro government taxes every dollar assessed at such a stifling rate. With a tax rate of $4.58 per hundred dollars of property value, the Metro Urban Services District has the highest property tax rate in the region. By comparison, the tax rate in Robertson County is $2.66 and the Sumner County rate is only $2.59. In fact, of the six counties that border Davidson County, none have a county property tax rate above $3.13. With comparables such as these, it is no wonder that many Nashville residents are now looking beyond Davidson County for homes. To challenge your assessment, call the Metro Board of Equalization at (615) 862-6059 by May 15. It is helpful to utilize any evidence about your particular property that illustrates that your home’s market value is less than the assessment. This includes prices of other properties in your neighborhood, evidence of structural damage to your home or even invoices demonstrating that recent improvements to your house were not as dramatic as the assessors claimed. If unsuccessful in this first challenge, you may appeal. If your assessment reflects market value but eats into your income, then make a challenge in a different way. Encourage lawmakers to cap the percentage by which property taxes can increase each assessment period if the home remains occupied by the same owner from one assessment to the next. Such a policy ensures that the poor and elderly do not risk losing their homes just because they happen to live in a booming area of town. Or, if all else fails, vote with your feet and follow the lead of thousands of former Nashvillians now choosing to live in communities that leave residents’ pockets with more of their hard-earned money come property tax season.