KNOXVILLE, Tenn. (WOKI / WVLT) – Knoxville homeowners are likely to see a new property tax rate on their next tax bill as city leaders adjust to the results of this year’s countywide property reappraisal.
The Knoxville City Council is considering an emergency ordinance that would reduce the city’s property tax rate from $2.1556 to $1.3956 per $100 of assessed value. The proposed change is part of Tennessee’s certified tax rate process, which is required after a reappraisal of property values.
Despite the lower tax rate, city and county officials caution homeowners not to expect significant reductions in their tax bills.
Why the Tax Rate Is Being Reduced
According to the Knox County Property Assessor’s Office, the lower rate is intended to keep overall tax collections revenue-neutral following substantial increases in property values across the county.
Chief Deputy Assessor Jim Weaver said property values countywide have increased by approximately 60% since the last reappraisal. Because property values rose significantly, the tax rate must be adjusted downward under Tennessee law to prevent an automatic tax increase.
The certified tax rate is designed to generate roughly the same amount of revenue from existing properties as the previous tax rate generated before reappraisal.
What Homeowners Can Expect
For many Knoxville property owners, the adjustment may result in tax bills that look very similar to previous years.
However, the impact will vary depending on how much an individual property’s value changed compared to the countywide average.
If a home’s value increased more than 60%, the owner could see a higher tax bill. If the property increased by less than 60%, taxes could remain relatively flat or even decrease.
Retired general contractor Frederick Carter, who owns a home in Holston Hills, said he welcomes any potential savings.
“Any decrease is great. I mean, the cheaper, the better. The less expensive, the better,” Carter said.
Carter noted that rising costs across the economy have put pressure on homeowners and households.
“Everything is going sky high now. It’s just … you need a break,” he said.
Not a Tax Cut
Local Realtor Todd Jewell emphasized that the certified rate adjustment should not be viewed as a tax cut.
“The state of Tennessee has a law that requires cities and municipalities, counties, to keep the tax revenue neutral, excluding any growth,” Jewell explained.
State law requires local governments to recalculate property tax rates after a reappraisal so that rising property values do not automatically result in higher tax collections.
Understanding Tennessee’s Certified Tax Rate
Tennessee’s “truth-in-taxation” law requires property values to be reappraised at least every six years.
Property taxes are based on assessed value, which represents a percentage of a property’s market value:
- Residential and farm properties: 25% of market value
- Commercial and industrial properties: 40% of market value
- Public utility properties: 55% of market value
After a reappraisal, local governments must establish a certified tax rate that produces approximately the same revenue as before the reassessment.
If a city or county wants to collect more revenue than the certified rate would generate, officials must hold public hearings and provide notice to taxpayers before adopting a higher tax rate.
Tax Payment Discounts Available
Knoxville residents who live within city limits can receive a 1% discount by paying their full property tax bill by the end of October.
Property owners have until the last day of February to make full payment without the early-payment discount expiring.
City officials say homeowners should review their reassessment notices and property tax statements carefully once they are issued to understand how the reappraisal affected their individual property value.
