Property Tax Hike | Nashville Real Estate
The topic of property tax in Nashville has been hotly debated in recent months and weeks since Mayor Karl Dean proposed a 53 cent property tax increase, an amount that would represent a 13 percent hike on property tax payments.
Mayor Dean has explained that 6,400 will be helped by an increased tax, which will provide money in the budget to improve aging school buildings, beef up the police department, fix roads, and provide a long-awaited pay increase for many metro employees. The alternative? Sharp reductions in teacher and police personnel.
On June 19th, the Metro Council voted in overwhelming support, 32-8, of the property tax increase, an increase that will be the first of its kind in seven years. The increase will be used to fund a $1.71 billion operating budget, with the property tax increase generating $100 million in new revenue including $8.6 million for reserve funds.
The hike means that the property tax rate for single-family homes would rise from $4.13 to $4.66, a 53 cent rise that has thus far been cleared by the Metro Council for two out of three votes. What does a property tax increase mean for homeowners? The amount homeowners pay for property taxes is calculated by figuring out what the property’s assessed value is. An assessed value is found by calculating 25 percent of the property’s appraised value. (The 25 percent is called the assessment ratio.) The assessed value is then multiplied by the tax rate which gives the amount owed for property taxes.
For example, with the current tax rate of $4,13, for a home that has an appraised value of $80,000, the calculated Assessment Value is found by multiplying $80,000 x .25 (known as the Assessment Ratio) which equals $20,000 (a.k.a. the Assessment Value). Now, you simply multiply the Assessment Value by the tax rate, in this case, $20,000 x .0413 (which represents a $4.13 tax rate). What you get is the amount that would be owed for property taxes, $826.
With the proposed property tax hike, the amount owed on the same house with the sale Assessment Value would be $932 ($20,000 x .0466).
The 53 cent hike only applies to those homes within the Urban Services District. A 48 cent increase applies to homes in the General Services District, however that is a more suburban area with fewer homes.
What are your thoughts on the proposed property tax hike? Are you in support of it or opposed to it? Share your thoughts in the comment box below.