It may be one of the most misunderstood processes in local government, as property reappraisals take place in some parts of the Upper Cumberland.
Smith County Property Assessor Terry Collins said during a reappraisal year, property values are assessed to meet their current market value. Collins said Tennessee issues a state certified property tax rate for each county or city during reappraisal, which counties or cities typically adopt to ease the tax burden.
“People are scared of that, but all it’s doing is getting things up to 100 percent of value,” Collins said. “For instance, if you’ve got a $500,000 house, that may go to $600,000 as far as the appraisal goes. But when the tax rate drops, you’re not going to see as big a jump, if any.”
Collins said the amount of increase, or decrease, is determined by how much a property appreciates between appraisals. Collins said the value of the land is part of the value as well as the condition of any buildings on the property.
“If you’re in a high growth area, and land was bringing in $5,000 an acre four years ago, but now it’s bringing $12,000 or $15,000 an acre, then your taxes are in all likelihood going to go up,” Collins said.
Collins said municipalities may raise tax rates above the state certified rate, but they can not do so without approval from the county commission. The move most also go through a public hearing. Collins said it is illegal to use reappraisal years solely as a fundraiser, and municipalities taxing above the certified rate must have good reason to do so.
Collins said there are special circumstances for new construction between reappraisal years. Collins said current market values are usually determined by property transactions within a six month time frame.
Collins said new houses are valued higher, so they are not included when determining the state certified rate. Collins said they are still taxed on the same rate despite their higher value.
“If I had 50 new houses to put on, those 50 new houses would be above and beyond the certified rate is,” Collins said. “It’s bonus money for the county.”
Reappraisals typically happen once every five years.
