Why are Reappraisals Necessary?
Reappraisal eliminates inequities that are created over time by changes in the real estate market, ensuring fairness and equity for all property owners.
Over time, a property’s market value can increase or decrease. If the Assessor’s record of a property’s market value does not change with the market, some people could pay too much in property taxes, while others could pay too little.
Reappraisals keep our property tax system fair. It’s that simple.
That’s why the State of Tennessee requires the Shelby County Assessor to conduct reappraisals every four years. Reappraisals allow the Assessor to adjust property values so that every property in Shelby County is appraised at market value. The last reappraisal occurred January 1, 2013, and the next reappraisal is scheduled for January 1, 2017.
Between reappraisal cycles, the Assessor’s staff:
- Visually inspects all property in Shelby County so that the Assessor’s assessment records reflect each property’s actual characteristics, such as: square footage, story height, exterior wall type, garage, carport and detached buildings.
- Verifies all property transfers as they occur in the market place. Appraisers verify each sale in order to ensure it is an arm’s-length transaction. These qualified sales are recorded in a sales file to compare to properties of similar size, age, location and description to help establish fair and equitable property values.
- Finally, the Assessor’s appraisal staff performs the valuation analysis in the fourth year of the cycle by utilizing the qualified sales and property characteristics according to accepted mass appraisal standards using the sales, cost and income approaches to value.
State law requires that Reappraisals be conducted in accordance with generally accepted appraisal principles. The Tennessee State Board of Equalization establishes the rules and policies to complete the Reappraisal, and makes the final approval of the new values. The state’s Division of Property Assessments directs, monitors and recommends the new values prior to the State Board’s review and final approval.
Reappraisals are revenue neutral:
In addition, municipal governments use the Assessor’s values in calculating property taxes. The money from these taxes generates over 60% of Shelby County Government revenues which are used to support public schools, fire, police and other public services.
The state’s Truth in Taxation law requires the local legislative bodies to adjust the tax rate to a “certified tax rate” that brings in the same amount of revenue as before reappraisal, excluding the previous year’s new construction growth. The legislative bodies may then set an effective tax rate after public notice.