Property Tax Assessments Questions Answered

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Weakley Countians should have received their final property assessment after any inquiries were made at the assessor’s office a couple of weeks ago. A new certified tax rate won’t be known until mid-June. As the process of property-value assessments takes place every five years in Weakley County, many have questions about the impact of these new assessments. 


To help find answers, this reporter reached out to the comptroller’s office, banks, realtors, renters, insurance, and mortgage companies to get those questions better answered for the county.


The assessed value of a property is a percentage of the property’s appraised value, according to the Weakley County Property Assessor’s website. The website shows that the percentage used is based on the properties’ classification status where residential is 25 percent, commercial is 40 percent, industrial is 40 percent, personal is 30 percent and farm is 25 percent.


Former Weakley County Assessor of Property David Tuck explained, “The certified tax-rate law states that a county or city can make no new money due to an appraisal. However, the county and the cities can give 10 days’ notice and have a public hearing to vote to exceed the tax rate.” Tuck said that has never been done by the county as long as he has held the position for 27 years. However, the City of Dresden opted to exceed its rate in the past, according to Tuck. He claimed, at the time, the proper steps were not taken to make that increase and “no one called them out on it,” adding anyone who exceeds the tax rate “ought to be voted out of office.” 
Tuck did say that what people don’t understand is that “in that five-year cycle, we hit one of the biggest growths in value that I’ve ever seen, and I’ve been in the tax business for 36 years – all over the nation.”


Tuck said there are various avenues that a person can take to appeal the assessment – one is to contact the assessor’s office, which that time frame has passed, but another route is to go in front of the county board of equalization, another is appealing through the administrative law judge, another is the assessment appeals commission and last would be through chancery court.


We asked Director of Communications of the Comptroller of the Treasury, John Dunn, whether or not the property assessment would affect people’s buying/selling price and how it affects their mortgage as far as taxes/escrow/insurance and he stated that “the Property Assessor’s appraisal of property should not have an impact on a homeowner’s mortgage, escrow, or home insurance. The assessed value is used by the county government (and a city government if the property is within a city jurisdiction) to calculate the amount of local property taxes owed on that property. Some people will view property assessment data online to see what the Assessor’s value is in order to get an idea of the approximate value of a property, but it doesn’t necessarily impact how a real estate agent might determine a listing price when selling a property.”


Dunn then explained what the appraisal ratios mean and why they vary from year to year saying, “Basically ratios are calculated every two years to help equalize the assessed values of properties that are assessed annually, such as public utility and transportation companies, and tangible personal property, with the current market value of other properties within the county.


The appraisal ratio is also used to help calculate property tax relief payments to persons eligible for that program (low-income elderly and disabled; and disabled veterans or their surviving spouses). For a county that is undergoing its reappraisal this year, it won’t have a ratio calculated until 2025.”
The county’s current tax rate is at $1.9727 and Weakley County Tax Assessor Lisa Odle said that it is likely to go down by 40 or 50 cents so we asked Dunn what the percentage would be on that if it goes down and is that percentage per what exactly.

 
“Weakley’s tax rate for Tax Year 2022 was $1.9727. This is the rate used to calculate the property taxes owed on a property within the county. Each city within Weakley County also has its own unique tax rate (2022 tax rates: Dresden – $1.4837, Gleason – $1.6638, Greenfield – $1.7322, Martin – $1.7544, McKenzie – $1.0661, and Sharon – $2.0000). If a person lives within Dresden, for example, they would have paid taxes to both the county and city – a total tax rate of $3.4564 ($1.97270 plus $1.4837),” Dunn stated.


“During a reappraisal year, the tax rate is adjusted due to something known as the Certified Tax Rate. So, when assessments go up during a reappraisal as they typically do, the cities and counties are provided with a new, lower tax rate that ensures that the city and county will bring in about the same amount of revenue as the year prior to the reappraisal. The county commission or city council could then choose to adopt either that rate, or it could choose to exceed that rate, by first holding a public hearing and then adopting that new rate. The Property Assessor doesn’t determine the tax rate. The tax rate is set by the governing body in each city or county.”
We asked Odle if banks would be using the assessment rates for buying and selling of properties and she stated, “The banks that I am familiar with will not use our appraisals for anything related to buying and selling. Our appraisals are mass appraisals, and they require a specified appraisal that pertains only to that property. If there are any banks that use our appraisals, I am not aware of it.”


Agency Manager of Weakley County Farm Bureau Bryant Rhodes stated that, “We are seeing property values continuously increasing. While a lot of people can’t believe what the new values are, we have been seeing for the past several years the increase in costs to repair or rebuild has outpaced the assessed values. When insuring properties, we insure replacement value rather than the assessed value.”


Rental property owner Jeff Washburn of Dresden stated the last time there was a property assessment that rental properties increased more (in value) than residential houses. Washburn said that if taxes do end up increasing on these rental properties, then property owners will have to raise their rent to account for the increases. Washburn said there’s no way to know that, however, until the certified tax rate for cities and the county is known.


According to First Savings Mortgage, mortgage rates will only go up if your property-tax rate goes up or if you, as a homeowner, purchase more home insurance to compensate for what your home is valued at. 


“The value that a county assessor places on a home and the property it sits on can be different from the appraised value that the bank or lending institution places on the home.” First Savings Mortgage said that an appraiser looks at similar homes in your area that have recently sold and arrives at an average-selling price, while an assessor looks at sales from recent years and improvements that are strictly for tax purposes.


“When you apply for your mortgage loan, the lender will set up the escrow portion of the loan based on the current property tax. Bear in mind that the next assessment may be a year or more away and the taxes may go up because the city or town added a new school or library. Property taxes are also based on schools, infrastructure and public services such as trash collection. As these things change, property taxes will increase to reflect the revenue needed to finance them. In the end, the higher the assessed value of a property, the higher the property taxes will be, and every time improvements are made, or property values in the area go up, so will taxes, and that – along with rising home insurance costs – will cause your monthly loan payment to fluctuate, sometimes on an annual basis.”

ReMax realtor David Sudberry said, “The state is required to do a property assessment every five years – so this one was from 2018 to 2013 and in that five-year-period, we have had unprecedented history-making, low interest rates which got lots of people in the market buying homes, high-price bidding wars, a tight market without a lot of houses out there – we are 18-25 percent below the number of houses we need on the market to meet the demand. Too much money chasing too few houses, people bidding crazy to get them because of low interest rates. When they did the tax appraisal for 2023, they look at what these houses have sold for, and they sold for significantly more than what they were worth so that’s forced all the appraisals up.


“Unless someone protests their appraisals, these appraisals won’t change again for five years. You’re not going to pay more property tax; you’re not going to pay according to the new appraisal, but the CTR will be adjusted down. People also think that they can sell their house for the amount shown on the tax assessment, but the market has slowed, and prices are coming more in line with what the properties actually worth, but we’re still in a property shortage because people are locked into a low-interest rate and don’t want to sell and buy another house and pay a higher interest rate,” Sudberry explained.
The adjusted tax assessments were sent out from Nashville June 6 and the board of equalization will be meeting June 22 at 9 a.m. at the Weakley County Courthouse County Commission Room. This meeting is via appointment only, as it is an individual-based hearing. Odle said that residents should know what their adjusted property taxes will be by the end of this month.

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