What Does the Assessor Do?
Chuck Jeffers, the current property assessor, is required by the Tennessee Constitution to list and value all property subject to ad valorem taxation on an assessment roll each year. The “ad valorem” basis for taxation means that all property should be taxed “according to value” which is the definition of ad valorem. The assessed value is a percentage of “fair market value” or “use value” as prescribed by law. Property is assessed as follows:
- Residential Land – 25% of its “fair market value” or “use value”
- Residential Improvements – 25% of “fair market value”
- Commercial Property – 40% of “fair market value”
All public service properties are assessed by the State Assessed Properties Division (formerly Public Service Commission).
What the Assessor Does Not Do
The assessor does not raise or lower taxes. The assessor does not make the laws which affect property owners. The Constitution of the State of Tennessee, as adopted by the voters, provides the basic framework for taxation, and tax laws are made by the Tennessee Legislature. The laws and regulations for assessment are set by the Tennessee Legislature. The tax dollars are levied by the taxing bodies, such as the city council or county commission and are collected by the Trustee’s Office. The assessor’s office has nothing to do with the total amount of taxes collected. The assessor’s primary responsibility is to find the “fair market value” of your property so that you may pay only your fair share of the taxes. The amount of taxes you pay is determined by a “tax rate” applied to your property’s assessed value. The tax rate is determined by all the taxing agencies within a district, city, or county, and those rates fixed by the Constitution. They include your city council and county commission. The tax rate is the basis for the budget needed or demanded by the voters to provide for services such as schools, roads, law enforcement, etc. Tax rates are simply those rates which will provide funds to pay for those services.
How is Your Assessment Determined?
To arrive at “fair market value” for your property the assessor must know what “willing sellers” and “willing buyer” are doing in the marketplace. He must also keep current on cost of construction in the area and any changes in zoning, financing, and economic conditions which may affect property values. The assessor uses the three nationally recognized appraisal approaches to value, those being cost, income, and market. This data is then correlated into a final value estimate by the appraiser. After your appraisal has been made, the appropriate percentage of value required by law is calculated as your “assessed value.”
What is Fair Market Value?
Fair market value is the price for property which would be agreed upon between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances; it shall be the highest price estimated in terms of money which property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used.
How Can My Taxes Increase?
When additional taxes are voted by the people, an individual’s property tax bill will increase. Also, when market value increases, naturally, so does the assessed value. If you were to make improvements to your existing property, for instance, add a garage, an additional room, or a swimming pool, the “fair market value” and, therefore, the assessed value would also increase. The assessor has not created the value. People make value by their transactions in the marketplace. The assessor simply has the legal and moral responsibility to study those transactions and appraise your property.
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