What is the property tax rate in Tennessee?
The property tax rate in Tennessee averages 0.52% of market value for owner-occupied homes (Tax Foundation 2026, using the 2024 American Community Survey). Among the 47 states we cover, only eight come in lower, including Alabama, Arizona, Utah and Colorado.
Your bill is set a different way. The county assessor appraises the property at market value, a class ratio set by state law turns that into an assessed value, and the county and city each apply a tax rate stated in dollars per $100 of assessed value. A home and an apartment building with the same market value can carry very different bills, because they sit in different classes.
How Tennessee property taxes are calculated
Multiply appraised value by the class ratio, divide by 100 and multiply by the tax rate. The Comptroller’s own example uses a $400,000 house: at the 25% residential ratio it has an assessed value of $100,000, and at a rate of $2.50 per $100 the tax is $2,500.
| Property class | Assessment ratio |
|---|---|
| Residential (one dwelling unit, owner or rental) | 25% |
| Farm | 25% |
| Industrial and commercial, including dwellings with two or more rental units | 40% |
| Business tangible personal property | 30% |
| Public utility | 55% |
Why apartment buildings are assessed at 40% in Tennessee
The Comptroller’s property assessment glossary lists, under industrial and commercial property, all real property used for dwelling purposes that contains two or more rental units. That puts a duplex rented to two households, a fourplex and a 200-unit complex in the same 40% class as an office building.
The effect is large. At the same tax rate, an apartment building pays 60% more than it would if it were assessed as residential, since 40% is 1.6 times 25%. The 0.52% statewide figure is built from owner-occupied homes at the 25% ratio, so it understates what an apartment owner pays. In Nashville, a commercial-class property can carry roughly 1.1% of its value in tax each year at the 2025 rate.
A similar split, drawn at a different line, shows up in the franchise and excise tax. For the FONCE exemption, the Department of Revenue treats rent from dwellings with more than four units as commercial rent, which is why a family LLC that owns a mid-size apartment building usually cannot use the FONCE exemption.
How Tennessee sets appraised value
Each county reappraises every parcel on a 4-, 5- or 6-year cycle, and the goal is market value as of January 1 of the revaluation year, according to the Comptroller. In counties on a 6-year cycle, values are also updated in the third year. The Comptroller also measures each county’s appraisal ratio, the median ratio of appraised values to market value, which is used to equalize values; its 2025 tax aggregate report lists ratios of 1.0000 for Davidson, Shelby, Hamilton and Williamson counties and 0.7167 for Knox County.
A ratio below 1.0000 means appraised values in that county have fallen behind the market since its last reappraisal. Ask your assessor when your county last reappraised and when the next one is due, because that date sets when a sale price is most likely to show up in your value.
Certified tax rate and truth-in-taxation
In a reappraisal year, Tennessee’s certified tax rate law, often called truth-in-taxation, requires a local government to hold advertised public hearings before adopting a rate that would raise more total taxes than the year before.
That protection is about the total levy, not your building. If a county lowers its rate after a reappraisal and your property’s value rose faster than the county average, your bill still goes up.
Tennessee tax rates by county
Tax rates are set each year by county commissions and city councils and are stated per $100 of assessed value. A parcel inside a city pays both the county rate and the city rate, and some areas add a special school district rate.
Metro Nashville-Davidson County shows how a consolidated government works. The Davidson County Property Assessor lists a 2025 General Services District rate of $2.782 per $100, down from $2.922 in 2024, and lists $2.814 for the Urban Services District. A June 2026 Metro Council update says the rate stays at $2.814 for the new budget year. The Comptroller posts every county and city rate each year on its property tax rates page; pull the line for your own parcel before you compare buildings.
How Tennessee compares with nearby states
Tennessee’s effective rate is among the lowest in the Southeast, though Alabama is lower still. The figures below are the Tax Foundation’s 2026 effective rates on owner-occupied homes; because Tennessee assesses apartments at 40%, the gap for a rental building can be narrower than this table suggests.
Owners comparing markets should look past the headline rate. Tennessee pairs its low rate with no personal income tax, while Kentucky, Georgia and North Carolina tax income and have higher effective property tax rates. For an apartment buyer, the parcel’s class and the local rate per $100 matter more than any state average.
| State | Effective property tax rate (Tax Foundation 2026) |
|---|---|
| Alabama | 0.37% |
| Tennessee | 0.52% |
| Arkansas | 0.56% |
| Mississippi | 0.58% |
| North Carolina | 0.66% |
| Kentucky | 0.74% |
| Virginia | 0.78% |
| Georgia | 0.79% |
| Missouri | 0.89% |
How to appeal your property value in Tennessee
Start with the county assessor, then file with the county board of equalization, which begins meeting June 1. An informal review with the assessor is not an appeal, so you must still file with the county board to keep your rights. Tax amounts are not a valid basis for appeal; you appeal value, an unequal value compared with other owners, or classification.
If you disagree with the county board, appeal to the State Board of Equalization by August 1 of the tax year or within 45 days after notice of the county board’s action was sent, whichever is later. An administrative judge hears the case, and chancery court review is available within 60 days after the State Board’s order becomes final.
- Early spring: the review process begins with the county assessor.
- June 1: county board of equalization begins meeting; check your county’s filing deadline.
- August 1, or 45 days after the county board’s notice, whichever is later: deadline to appeal to the State Board.
- March 1 of the following year: the State Board can no longer accept the appeal.
Classification and exemptions for Tennessee apartments
For a market-rate apartment building, the main lever is classification rather than an exemption. Ask your assessor about any program tied to affordable or subsidized housing before you assume it applies, and check whether it ends when the building sells.
Classification is the place to check instead. A building with a single rented dwelling belongs in the 25% residential class, and one with two or more rental units belongs in the 40% class. Make sure your parcel is classed the way it is used, and raise a classification error with the county board, since classification is one of the listed grounds for appeal.
Worked example: property tax on a $2M Tennessee apartment building
Take a 24-unit building in Davidson County appraised at $2,000,000. At the 40% commercial ratio its assessed value is $800,000, and at the 2025 General Services District rate of $2.782 per $100 the yearly tax is $22,256, or about 1.11% of value. If the same building were assessed at the 25% residential ratio, the tax would be $13,910. At the Comptroller’s illustrative rate of $2.50 per $100, the tax would be $20,000.
Now the sale and the next reappraisal. Suppose the building was appraised at $1,500,000 before the buyer paid $2,000,000. The buyer’s bill at $2.782 is $16,692. If the next county reappraisal sets the value at the $2,000,000 price and the rate stays the same, the bill rises by $5,564 a year to $22,256. At an illustrative 6% cap rate, that cuts about $92,700 from what a buyer could pay. A certified-rate rollback in the reappraisal year would shrink that gap only if the county’s values rose about as fast as yours.
| Scenario | Assessed value | Yearly tax at $2.782 |
|---|---|---|
| Appraised at $2,000,000, 40% class | $800,000 | $22,256 |
| Same building if it were 25% class (hypothetical) | $500,000 | $13,910 |
| Appraised at $1,500,000 before reappraisal | $600,000 | $16,692 |
| Increase if reappraised at the $2,000,000 price | $5,564 |
How property tax affects your sale price
Buyers value apartment buildings on net operating income, so a buyer in Tennessee prices in the tax they expect after the next reappraisal, not just this year’s bill. If your county is due to reappraise soon and values have risen, expect the buyer to model a higher tax line.
You can help by showing the numbers first. Pull the last two tax notices, the appraised value, the class on the parcel record and the date of the county’s next reappraisal. If a past appeal lowered your value, bring the board’s decision.
A buyer who knows the value will reset at the next reappraisal will also look at the county’s rate history after past reappraisals. Showing how the rate moved in Davidson County from $2.922 in 2024 to $2.782 in 2025, or the equivalent in your county, gives the buyer a fact to work from instead of a guess.
Selling an apartment building in Tennessee
Skyline buys apartment buildings with five or more units in Tennessee, in Nashville, Memphis, Knoxville, Chattanooga and the growing suburbs around them. We buy directly, close on your timeline, and can work inside 1031 deadlines. We underwrite from your actual tax notices and the county’s reappraisal schedule.
For the tax on the sale itself, see Tennessee capital gains tax on real estate. For the notice, deposit and eviction rules a buyer will inherit, see Tennessee landlord-tenant law for apartment owners.
