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See how low property taxes in Tennessee are

Written by:
January 14, 2022
James R. Martin // Shutterstock

This story originally appeared on Roofstock and was produced and distributed in partnership with Stacker Studio.

See how low property taxes in Tennessee are

Ask any homeowner about expenses and they’ll tell you: If you’re a first-time buyer, you need to carefully calculate the total cost of owning a home before taking the plunge into homeownership.

Owning a home comes with dozens of additional costs, from mortgage payments and interest to upkeep, renovations, and household utility bills. It doesn’t take long before expenses add up—especially when they come on top of potential property tax costs.

To determine which states offer the lowest in property taxes, Roofstock analyzed 2021 data from Wallethub and the U.S. Census Bureau. Costs were then determined for real estate property tax rates, median real estate tax payments, and median home prices for every state and Washington D.C. These amounts were then contextualized with what first-time homebuyers need to know about property taxes.

Tennessee by the numbers

- Effective real estate tax rate: 0.71%
- Annual taxes on $217.5k home: $1,548
- Tennessee's median home value: $167,200
- Annual taxes on Tennessee's median home: $1,190

Tennessee's real estate taxes are determined at the local level in this state, so low property taxes aren’t uniform across the board. For example, homeowners in Memphis pay real estate rates that are about twice as high as the state average. Adding to the variation in tax rates is the fact that county appraisers are required to reassess the property in their counties every four to six years, which can cause homeowners to have regular increases in their tax bills.

But there are certain factors that help keep the tax rate low overall in this state. For starters, real estate taxes in Tennessee are not applied to the full market value, but the assessed value, which is equal to 25% of the market value for residential properties. Certain exemptions—as well a relatively low median home value overall in this state—help to keep the overall real estate tax rate low in Tennessee.

In some states, the high cost of property taxes can cause a home with an otherwise affordable price tag to be well out of someone’s price range. In others, the low cost of property taxes could give you a little more wiggle room in your budget—which is never a bad thing.

If the idea of weighing the estimated costs of property taxes seems overwhelming to you, start by looking at the states with the lowest property taxes listed below. The national list is reverse-ordered by effective real estate tax rate, with Hawaii as the state with the lowest property taxes, though the results would look different if it was ordered by the taxes on the state's median home. Whether you're looking for a dream home or next big investment, owning a home comes with several additional costs, property taxes being one of them.

States with the lowest property taxes

#1. Hawaii: 0.28% effective real estate tax rate
#2. Alabama: 0.41% effective real estate tax rate
#3. Colorado: 0.51% effective real estate tax rate
#4. Louisiana: 0.55% effective real estate tax rate
#5. Washington, D.C.: 0.56% effective real estate tax rate

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