VOL. 41 | NO. 6 | Friday, February 10, 2017
Blue-collar neighborhoods facing higher property taxes
By Kathy Carlson
The area southeast of downtown – bordered by Murfreesboro Road to the east and I-65 to the west –used to be an under-the-radar destination for value-conscious homebuyers. It features international shops and restaurants, varied housing styles and quick access to the heart of the city.
Now it can claim Metro’s fastest-growing real estate values – an estimated 57 percent increase since 2013.
So when Metro reappraisals are mailed in April – as they are every four years – that area’s residents will be looking at a property tax increase.
Housing prices have risen an average of 35 percent across Davidson County over the past four years. That means homeowners whose property value has risen at a rate more than 35 percent will pay a higher tax rate.
Homes with increased value of 34 percent or less – that includes 18 of the 35 Council districts – will have their tax rates lowered.
Property Assessor Vivian Wilhoite – along with Metro Council members, the Metro Trustee and other elected officials – want homeowners to understand what the changes mean.
District 16 Metro Councilman Mike Freeman represents the Thompson Lane-Nolensville Road area, the district with the 57 percent increase in property values. He has lived there for the past seven years and isn’t surprised to see the run up in property values.
The Glencliff-Woodbine-Radnor neighborhoods are among Nashville’s last to participate in the hot real estate market, he says.
Residents have noticed, too.
“There’s been a lot of changes, a lot of houses that have been bought and redone and then sold for quite a bit more,” says Judy Beard, who has lived in the area since the 1980s. She and her husband, Ed, want to stay in their Glencliff-area home.
“I’m sure our property taxes will go up. It’s just kind of a given that that’s going to happen,” Beard says, adding she’ll wait and see what happens.
Property values have changed by as little as 24 percent – Council District 10, Goodlettsville to Ridgetop – to the 57 percent in Freeman’s District 16, Wilhoite says.
No council district in Nashville has recorded declining average property values over the past four years, according to assessor’s office data. That’s not to say that individual properties may not have decreased in value, only that the trend in each area is upward.
And as the tax system is designed, Metro cannot gain a windfall in taxes just because property values rise. The assessor’s office calculates an adjusted tax rate that will provide Metro with the same property tax revenues as last year.
Property taxes will rise or fall depending on whether the property value rose more than 35 percent or less than 35 percent.
By any measure, the escalating property values are noteworthy.
“This is the highest average rate of increase on property values since Metropolitan government began the four-year (required by state law) reappraisal process, other than the first reappraisal that occurred in 1973,” Wilhoite states in an email. The last appraisal year, 2013, saw property values rise by an average of 5.33 percent.
Wilhoite and her staff, sometimes joined by other officials, have held dozens of reappraisal road shows so far this year to help educate residents. Their message:
The purpose of reappraisal is to make sure everyone pays their fair share of property taxes, based on current fair market values determined during the calendar year 2016.
The Assessor’s office values properties based on comparable sales of similar properties.
It doesn’t tax properties.
By law, the Assessor has to adjust the tax rate so it is revenue-neutral to Metro, meaning that Metro can’t take in more in property taxes than last year due to increased property values alone. This adjusted rate is called the certified tax rate and must be approved by the state.
The reappraisal, by itself, may affect a homeowner’s taxes depending on how much the property value has changed compared to the average change. You’ll pay about the same if your home’s value has risen by about the average amount for the county as a whole. If the value has risen faster, you’ll pay more. If it has risen more slowly, you’ll pay less.
Mayor Megan Barry has ruled out a tax rate increase for her 2017-18 budget.
“While the upcoming property reappraisal will result in a new tax rate that is revenue-neutral for Metro government, we understand that some property owners living in fast-growing areas will see higher tax bills as a result,” Barry wrote in an email.
“Because we know the reappraisal will hit some property owners harder than others, I’m committed to submitting a budget to the Metro Council that will not include a property tax increase.”
A little less than half of Metro revenue comes from property taxes.
So far this year, the Assessor’s office has conducted 41 community outreach presentations, with another 22 still to come.
Wilhoite says about 40 people have attended each meeting on average. Times and dates for upcoming presentations are online at www.padctn.org/community-outreach.
A recent afternoon meeting in Crieve Hall drew about 40 people, mostly seniors who own their own homes. A Saturday morning meeting in North Nashville included a like number of homeowners plus prospective homeowners concerned about affordability.
The question Wilhoite hears most in meetings is whether one single-family home will be appraised in comparison with a nearby, similar house that was torn down and replaced with a pricier house or houses.
“Properties with older homes will be compared to sales of older homes that are comparable to the original home – apples to apples, oranges to oranges,” she explains.
At the Crieve Hall meeting, Wilhoite said her office assesses property at the neighborhood level, with about 800 different neighborhoods in Nashville. In all, the office is appraising more than 247,000 properties.
Her office will mail reappraisal notices to property owners beginning in mid-to-late April, not all at once but in timed increments and in coordination with council members.
There’s an appeal process for those who disagree with the appraisals, starting with optional informal reviews in the Assessor’s office. The formal appeals start with the Metro Board of Equalization and proceed to the State Board of Equalization. If necessary, property owners can go to court.
It’s extremely important to meet all appeal deadlines, which hadn’t yet been set when this article was written. Wilhoite urges residents to check the Assessor’s office web site, padctn.org, and contact the office at (615) 862-6080 with questions.
A dedicated phone line will be set up in April for people wanting the assessor’s office to informally review their appraisals.
Residents also may be eligible to have their property taxes frozen or to obtain property tax relief through programs administered through the Davidson County Trustee’s office.
The deadline for applying for tax relief is April 5.
Eligibility depends on age, disability, veteran status, income and other factors.