What to Know About Property Taxes & Relief in the Nashville, TN Area

Purchasing a home in Tennessee, particularly in the Nashville area, brings excitement and new opportunities. It’s a thriving area with much to offer its residents. However, one aspect that homeowners should consider is the property tax system. Understanding property taxes and the available exemptions and relief programs can help you plan your finances more effectively. Let's dive into what you can expect regarding property taxes in Tennessee, relief options, and how Dream Finders Homes can help you find your ideal home in this vibrant region.

How Much Are Property Taxes in Tennessee?

One of the main financial considerations when searching for a new home is property tax. Tennessee is known for its relatively low property tax rates compared to many other states. The state assesses property taxes based on the appraised value of a home, applying specific tax rates that vary by county and municipality. The tax rate can differ slightly depending on location, but according to the Tax Foundation, the average tax rate was 0.67% of a property’s assessed value in 2021.

Property tax in Tennessee is calculated by multiplying the assessed value of a property by the local tax rate. Residential properties are assessed at 25% of their market value, making it essential to be aware of the assessed value of your home when estimating your property tax bill. For instance, if a home in the Nashville area is appraised at $400,000, the assessed value would be $100,000 (25% of $400,000). With a tax rate of 0.67%, the annual property tax for this home would be around $670.

Tennessee Property Tax Relief Programs

Tennessee offers several property tax exemption options to help reduce the financial burden on homeowners. These exemptions primarily benefit seniors, disabled veterans, and homeowners with disabilities, easing the cost of living for these groups. Here’s a breakdown of the main Tennessee property tax relief programs:

Tax Relief for Elderly Homeowners

Tennessee provides property tax relief to seniors aged 65 and older, offering a potential reduction in their property tax bill. Eligibility depends on income limits set by the state, which can vary annually. Qualified elderly homeowners can receive a portion of their property taxes reimbursed by the state, providing significant financial relief.

Relief for Disabled Homeowners

The state also extends tax relief programs to homeowners with a total and permanent disability. Like the relief for seniors, eligibility for this exemption is based on specific income limits. Qualified homeowners can apply to have a portion of their property taxes reimbursed to help offset living costs.

Tax Relief for Disabled Veterans

Tennessee offers substantial property tax relief for disabled veterans. Veterans with a service-related disability or surviving spouses of a disabled veteran may qualify for a reduction in their property taxes. As detailed in their 2024 Property Tax Relief Program brochure, there are a few eligibility and document requirements. If you qualify, this relief can significantly lower your property tax burden, a well-deserved relief for those who have served the country.

Each of these options requires that the homeowner use their home as a primary residence and have a maximum market value on which tax relief is calculated.

While not directly tied to property, Tennessee also exempts certain forms of income from state taxes, such as retirement income and income for those with a disability. Understanding property tax exemption in Tennessee can provide prospective homeowners – particularly retirees or those with disabilities – a clearer picture of the state's additional financial advantages.

Browse Our Gorgeous Townhomes & Single Family Homes for Sale!

With a better grasp of the property taxes in Tennessee, it’s time to explore the incredible housing opportunities available near Nashville, especially with Dream Finders Homes. We’re proud to expand our offerings of beautifully designed new construction homes in Tennessee.  We have an extensive selection of townhomes and single family homes that cater to various lifestyles and budgets.

Whether you're looking for spacious layouts for growing families or modern townhomes perfect for young professionals, Dream Finders has something for everyone. Our new home communities are located in a range of Nashville suburbs, each embodying wholesome, small-town charm with the conveniences of a nearby big city. From easy access to downtown areas and recreational activities to everyday conveniences like shopping and dining, these communities are close to everything you need. Not to mention vibrant amenities like pools, dog parks, walking trails, and more.

Even more stunning than the communities themselves are the homes within them. Dream Finders ensures you’ll love your home inside and out. They include modern contemporary features, energy-efficient designs, and the ability to personalize finishes to suit your taste. No matter what you’re looking for, we have homes to fit your needs. Need a low-maintenance townhome with access to top-rated schools? Consider Emberly in Thompson’s Station. Need a large, half-acre homesite to feel like your private retreat? Goodwin Farms in Fairview is the perfect place for you. Explore our current homes for sale near Nashville, TN to discover your dream home in this thriving region.

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Property taxes are an important part of homeownership, but they shouldn't overshadow the joy of finding your perfect home. With Tennessee’s relatively low property taxes and various relief programs, living in a Dream Finders home can be an excellent long-term investment.