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Old 09-29-2006, 01:25 AM
 
Location: East TN
1,025 posts, read 2,507,820 times
Reputation: 631

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Ok,

This is sure to stir up some debate, but from what I figure, the property tax in TN is much higher than it is here in WA state. I've always heard that it was cheaper in TN.

Example. From what I've seen, in TN, the county tax assessors appraises property real close to whatever the market value is. Say $100,000 value, then they take 25% of that for residential property, in this case $25,000. Then that is multiplied by the county tax and city tax.

Take Kingsport, TN for example, Sullivan county tax is 2.53% and Kingsport city tax is 2.26% for a total of 4.79% x $25,000 = $1197.50. That is alot of tax, almost $1200 in taxes on a $100,000 house.

Now lets say you buy a new house, I think that it's fair to say that $300,000 for new construction is not out of line, at the average of $125 per square foot to build, plus the cost of land. $125 x 2000 sqft = $250,000 + $50,000 for some acreage = $300,000.

$300,000 / 25% = $75,000 x 4.79% = $3592 ouch!! that's about $300 per month just in property tax!!!

I live in a similar home in WA state, it's 3100 square feet and I pay $2200 per year in taxes. For those of you that don't know, we in WA do not have a state income tax either (just like TN).

So why do I bring the taxes up? Because I am planning on moving to TN and I'm wondering why the taxes are so high? And I'm no longer buying the "TN has lower property taxes" story.

I suppose that if I don't move to Sullivan county, nor live anywhere near a city and only buy an older, cheaper house than the tax bite won't be so bad.

Sorry for the rant, but taxes really drive me up the wall. Yes we should all pay our fair share, but giving taxes to policitcians is like giving crack cocaine to a crackhead. They are going to blow it and ask for more 10 minutes later. And all you are left with is no money and a mess to clean up.

Ugh!!!!!!!!!! So all of you people talking low taxes, I'm not sure where you are coming from, but I know compared to here in WA the taxes in TN are SKY HIGH!!

But TN does seem like a nice place and I will be looking for land in the boonies in the cheapest county that I can.

Tony

p.s. Don't think about commercial real estate, it's 40% of value, yes I was thinking about opening a business, ugh.
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Old 09-29-2006, 01:49 AM
 
Location: East TN
1,025 posts, read 2,507,820 times
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Here's an even scarier example,

Knoxville, TN combined rate of 5.5% per $100

Home value of $100,000 (modest home) x 25% = $25,000 x 5.5% = $1375

I'm paying $1476 on a home worth $230,000 here in WA.

Yes I suppose I could just stay here where the taxes are lower and the wages are higher, but I think that living in TN is still cheaper.

How's it cheaper? Paying the same amount of tax on a home that costs $230,000 in WA or one that costs $100,000 in TN doesn't matter all that much. What really matters is paying that darn mortgage. So if I can pay a $100,000 mortgage for the same home it's going to be a whole lot cheaper than $230,000 even if I am not making nearly as much money.

So, in conclusion I'm still moving to TN because the land and existing homes are much cheaper than here, there is less traffic, people seem to be nicer, but the property taxes are still way higher! :-)

Tony
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Old 09-29-2006, 07:21 AM
 
Location: Beautiful East TN!!
7,285 posts, read 14,199,902 times
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Default True example

I am not quite sure on your math, but I will give you a true example of property taxes here in the Tri-Cities. 3 different counties.
This is tax on home in Sullivan County, Kingsport city limits so both city and county taxes.
Appraised resale value, $309k, 3000sq ft home, 1.10 acres, the tax appraised value (2005) is $175k, assessed amount is $70,000 the total tax bill for 2005 was $1,771.00 (combined, city and county)
This is on a home in Washington County, about 15 minutes from Down town Kingsport. County tax only, no city tax.
Appraised resale value $135k,1520 sq ft home, .45 acre. The tax appraised value is $89,500 (tax valued and based on 2004) So assessed amount is $22,375 the annual tax bill is $418.00

Another example in Greene County, 15 miles from down town. County tax only, but not "rural"
Appraised resale value $88,000. 1486 sq ft home, .60 acres. Tax assessed value (year 2003) $50,800, assessment amount is $12,700 annual tax bill is $248.00 (2005 bill)

I guess maybe coming from Fl, where in 97, my last year there, I paid $1,100.00 on a $70,000 Shoe box, less than 1000 sq ft house, with a postage size lot......yea, TN property taxes are CHEAP! hahahaha
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Old 09-29-2006, 09:09 AM
 
9,125 posts, read 23,519,224 times
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"Cheap" is relative. To me, the taxes you guys are talking about are dirt-cheap. My house here in NJ has a market value of around $350k, and the property taxes just went up to $4,900/year. That's on top of the state income tax. So, to me TN's taxes are "cheap"- especially when that $300k house with the $1700 taxes is almost 3 times the size of mine, with almost 10 times the acreage.......

Bob
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Old 09-29-2006, 09:59 AM
 
Location: Pikeville, Tn
94 posts, read 255,593 times
Reputation: 91
Thumbs up I think I have your answer

Quote:
Example. From what I've seen, in TN, the county tax assessors appraises property real close to whatever the market value is. Say $100,000 value, then they take 25% of that for residential property, in this case $25,000. Then that is multiplied by the county tax and city tax.
I can't speak for other counties but our actual appraisals here are not anywhere close to the market value. I'd have to drag out the paperwork but I think my property actually is appraised somewhere around %80 of the market value.

They do use this lower figure to multiply the tax rates, etc.
Obviously with this formula you would see some tax savings.

Kerry
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Old 09-29-2006, 10:10 AM
 
Location: Cookeville, TN
87 posts, read 285,545 times
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It is all relative. I live in New Hampshire, own a 1800 sq ft "raised ranch" on two acres of property. The accessed value is 350k with a tax liability of $5200.00. NH doesn't have neither a Income Tax nor Sales Tax though.....thank God !!!!
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Old 09-29-2006, 10:17 AM
 
10 posts, read 30,574 times
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Quote:
Originally Posted by BobKovacs View Post
"Cheap" is relative. To me, the taxes you guys are talking about are dirt-cheap. My house here in NJ has a market value of around $350k, and the property taxes just went up to $4,900/year. That's on top of the state income tax. So, to me TN's taxes are "cheap"- especially when that $300k house with the $1700 taxes is almost 3 times the size of mine, with almost 10 times the acreage.......

Bob

I agree - I moved from IL where the taxes for my modest home $190,000 which sat on less than 1/4 acre about 25 miles north of Chicago were $5,900 in 2004. My current - $130,000 home on 5 acres - $579.00. Oh yeah - lets add the state income tax and the 6.75% sales tax in IL. TN doesn't have the state income, but the sales tax is at a whopping 9.75%. Can really be a pinch on big ticket items.
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Old 09-29-2006, 11:14 AM
 
Location: Beautiful East TN!!
7,285 posts, read 14,199,902 times
Reputation: 2650
Quote:
Originally Posted by octoberlyn View Post
...... but the sales tax is at a whopping 9.75%. Can really be a pinch on big ticket items.
Remember, on big ticket items, anything over $1600 for one item, is taxed at a different sales tax rate. The first $1,600.00 is at 9.75%, after that it is at a lower sales tax rate. I think it is county tax only rate...maybe. Been many years since I was an accountant and had to keep up with it, but I do know you don't have to pay the full 9.75% after that $1,600 cost of ONE item.
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Old 09-29-2006, 12:25 PM
 
408 posts, read 1,363,494 times
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One side note since you were adding city and county tax, houses in the city are usually cheaper which is supposed to sort of balance things out. I know in the long run it probably won't. But also, if you do live in the city, you get city services. Maybe city boundaries are also different there. In some part of the post you mention living way out in an older, cheaper house. Many of the houses in the city limits are the older, cheaper homes with the main exception being historical homes. Not that there aren't nice, new, expensive homes in the city limits, you just see those in the county more. You don't have to live out in the boonies to be considered county. I live 18 miles from my job in Johnson City and I live in another county and only pay county tax. Even in Sullivan County, you could still live in what would give you a Kingsport address even though you are not considered living in the city.
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Old 09-29-2006, 12:55 PM
 
1,075 posts, read 2,473,330 times
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Tony, your not comparing apples to apples.

on a home you have market value, assessed value, most states/counties use the 25% of assessed value.

these will be assumptions

market value - 100,000
assesed value - 70,000
tax rate multiplier - 5% total

70,000/25% = 17,500 base taxed amount
17,500x5% = 875.00 yearly tax bill

so yup tn is better in my opinion

you live in the city sure taxes are almost double, your paying for all those city livin goodies, but do you really use or need any of them, some do some don't.

9% sales tax rate no biggy, lower rates apply to larger items, i certainly wouldn't wanna pay 9% on a new car.

if you live in the tri cities area or chattanooga who says you have to do your shopping in tn, go to another state it's just a hop skip & jump to ky, va, al, or ga.

I'll add this also, wages may be lower in the south compared to north or west but consumer goods are lower also to offset that so it all balances out in the long run.

from what i have seen in the cost of property in the northwest i don't see how anyone can afford to even live there, the cost of living index is way higher, now compare that to tn.

Last edited by joee; 09-29-2006 at 01:24 PM..
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