One of the best things about the cost of living in Tennessee is that the average property taxes are lower than almost anywhere else in the country. When you're buying a new home in the state, preparing for property taxes helps you shop within your desired budget. Learn how your tax rate is calculated and where you can find the lowest property taxes in Tennessee.

Tennessee's Advantage: Low Property Taxes

In 2022, the average Tennessee homeowner paid just 0.71% of their home's value in property taxes, compared to the national average of around 1.3%. This difference can result in thousands of dollars in savings over time.

To understand how your property tax bill is determined, three key factors come into play:

• Appraised Value: The county assessor determines your home's appraised value, which is used to calculate your property taxes.
• Assessment Ratio: Tennessee uses an assessment ratio of 25% for residential properties. This means that your home's assessed value, used to calculate your taxes, is 25% of its appraised value.
• Tax Rate: Each county in Tennessee sets its tax rate. This rate is applied to your home's assessed value to determine your annual property tax bill.

Understanding these factors can help you estimate your tax burden in different locations and decide where to purchase property.

Counties in Tennessee With Low Property Taxes

Compared to the rest of the country, all of Tennessee's best counties have low property tax rates. These areas offer homeowners the potential for lower annual property tax bills, which can contribute to cost savings in your overall homeownership expenses. Remember, property taxes are just one part of the picture. While rates may be lower in some areas, the overall cost depends on the appraised value of your property. 

Pickett County

Pickett County stands out in Tennessee for its remarkably low average property tax rate of 0.37%. With rates lower than the state average, residents in Pickett County benefit from cost-effective property taxes.

Nestled on the northern border of Tennessee, Pickett County is renowned for its pristine natural beauty and serene lakeside living. The county seat, Byrdstown, serves as a gateway to Dale Hollow Lake, making it a perfect locale for those seeking a peaceful retreat or waterfront property in one of the state's cheapest cities.

Cumberland County

With an average property tax rate of 0.38%, Cumberland County in Tennessee offers residents a favorable tax burden compared to other counties in the state. Property taxes in Cumberland County are relatively low, contributing to the overall affordability of living in the area.

Cumberland County, Tennessee, offers a variety of cities and communities, each with its own unique character and charm. Here's a brief overview of the key cities within the county:

• Crossville: Serving as the county seat, Crossville is known as the "Golf Capital of Tennessee," featuring numerous top-rated golf courses. 
• Fairfield Glade: This master-planned community offers a resort-like lifestyle with its lush golf courses, lakes, and a vast array of recreational amenities. 
• Lake Tansi: As another planned community, Lake Tansi is perfect for those looking for a vacation home or a peaceful year-round residence. It features a large lake suitable for boating and fishing, golf courses, and various other recreational facilities, making it a popular choice for outdoor enthusiasts.
• Pleasant Hill: Known for its quiet, small-town atmosphere, Pleasant Hill offers a slower pace of life ideal for those looking to escape the hustle and bustle. The town is home to the Uplands Village, a retirement community that integrates holistic living with environmental consciousness.

Sevier County

Sevier County has an average property tax rate of 0.41%, making it an appealing option for cost-effective homeownership. As the gateway to the Great Smoky Mountains, Sevier County is a hub for tourism and entertainment, containing some of Tennessee's best attractions. Cities like Gatlinburg, Pigeon Forge, and Sevierville offer vibrant communities with a variety of housing options, from cozy mountain cabins to luxurious resorts, attracting both tourists and permanent residents.

Fayette County

The average property tax in Fayette County is around 0.40%. Situated to the east of Memphis, Fayette County offers a blend of rural charm and suburban convenience. 

• Somerville: Serving as the county seat, Somerville is the largest town in Fayette County. It is a small, charming community that provides essential services and acts as the administrative heart of the county. 
• Oakland: This town has seen significant residential development in recent years, attracting many who appreciate its lower property taxes and spacious living environments compared to the more urban Shelby County to the west.
• Rossville: Rossville is a smaller town that boasts a tight-knit community and rural charm. It's known for its historic district and quiet lifestyle, making it attractive to those looking for a slower pace of life.

Fentress County

Benefiting from a 0.44% average tax rate, Fentress County is known for its rugged landscapes and outdoor recreational opportunities, Fentress County is a haven for nature lovers. The county seat, Jamestown, is famous for the Big South Fork National River and Recreation Area, making it a prime spot for adventure enthusiasts looking for homes in close proximity to extensive trails and natural beauty.

Rutherford County

Rutherford County in Tennessee stands out for its exceptionally low property tax rates near Nashville. With a tax rate below the state average at $1.8762 per $100 of assessed value, homeowners in Rutherford County benefit from a lower median property tax bill.

As one of the fastest-growing counties in Tennessee, Rutherford County combines the allure of historical sites with the conveniences of modern suburban living.

A few notable cities in Rutherford County include:

• Murfreesboro: One of the best suburbs near Nashville. Murfreesboro is the county seat and offers a range of housing options, from new developments to historic homes.
• Smyrna: A large town, and rapidly growing; it was the largest town by population on the 2020 Tennessee census. It also has one of the busiest airports in the state.
• La Vergne: Located at the southern end of Percy Priest Lake, it's the closest city in the county to Nashville.

Cheatham County

Cheatham County offers residents affordable taxation compared to other areas in the state. The property tax rate in Cheatham County is $2.50 per $100 of assessed value, resulting in an average property tax bill of around $1,100 per year for residents.

These property taxes play a crucial role in funding local services and infrastructure within the county. By keeping property tax rates low, Cheatham County ensures that residents can enjoy the benefits of living in the area without shouldering excessively high tax burdens.

Cheatham County provides a quieter, more laid-back lifestyle with easy access to the amenities of the bustling city. It's an attractive place for those who appreciate a balance between rural serenity and urban access, with communities like Ashland City offering affordable housing and scenic views.

Property Tax Relief in Tennessee

Tennessee offers several property tax relief programs that help make homeownership more affordable, particularly for specific groups such as elderly residents, disabled individuals, and veterans. One of the primary programs is the State Property Tax Relief Program, which is designed to assist those who are 65 years or older, disabled homeowners, and veterans who have been disabled as a result of their service. This program works by reimbursing a portion of the property taxes paid on an individual's primary residence, depending on their income levels and the total amount of property tax due. 

Another significant aspect of Tennessee's tax relief efforts includes the tax freeze program, available in some counties and cities. This initiative allows qualifying homeowners to lock in the property tax rate at the amount they were charged when they first qualified for the program, preventing any increases in property taxes as long as the eligibility requirements are met and the individual continues to live in the home. 

Tennessee Homeownership: Smart Strategies

Tennessee has low property taxes, which is a major benefit for homeowners. If you're searching for budget-friendly living, ensure this state is on your radar. When shopping for a home in Tennessee, research the property taxes of specific counties that interest you. Use online calculators and county assessor resources to get accurate figures. Remember that your actual payment will be ultimately determined by the value of your home. As such, towns near Nashville may ultimately offer lower tax bills than cities with comparatively lower rates.