Seniors and TN Property Tax (sales, insurance, homes)

[LauraC]

I don't think I've seen this topic in any threads but the good people of Tennessee voted this November to freeze property taxes for seniors at age 65. In other words, the property tax you pay at age 65 won't be increased after that unless you make improvements to the property but it will apply only to a specific income level. What that income level is, I do not know.

The state legislature meets in January to figure out how they will implement it and then local governments have to agree with the package but the state says it's making it a priority item because it was on the ballot.

Just another thing to pay attention to in the coming months, if you will be retiring on a fixed income and worried about escalating taxes because of all of these new people coming into the state.

[RoseOh]

How will this Property Tax freeze for seniors affect retirees relocating to TN?

[mbmouse]

If I am correct, but don't quote me on this, the way I read it was that if you buy or own a home in TN the tax rate as of your 65th birthday (the primary owner/borrower) is the tax you will always pay. It freezes it. That rate will go up a bit if you do major (add sq footage etc.) improvements, but that will be on a sliding scale rate as well.
I believe if you buy a home and you are already over 65, the tax at the time of closing on that property will remain the same for as long as you own and live in the home.
I don't think this will apply to investors over 65 that own several homes. Primary residence only.

[LauraC]

Originally Posted by mbmouse

If I am correct, but don't quote me on this, the way I read it was that if you buy or own a home in TN the tax rate as of your 65th birthday (the primary owner/borrower) is the tax you will always pay. It freezes it. That rate will go up a bit if you do major (add sq footage etc.) improvements, but that will be on a sliding scale rate as well.
I believe if you buy a home and you are already over 65, the tax at the time of closing on that property will remain the same for as long as you own and live in the home.
I don't think this will apply to investors over 65 that own several homes. Primary residence only.

That's the way I interpreted it, too. The key is, however, at what income level will it apply? According to the article I read in the Tennessean, that's something the state legislature will take up in January. I bet the ballot initiative didn't mention an income level being applied.

[mickey g]

sounds similiar to al. taxes although i believe if u are older than 65 and a resident of al. u pay no property taxes. i believe fl. just passed a law for a reduced property tax for 65 and older based on income. that would be the **only** benefit i can see coming from fl. these days.

[mbmouse]

Originally Posted by LauraC

That's the way I interpreted it, too. The key is, however, at what income level will it apply? According to the article I read in the Tennessean, that's something the state legislature will take up in January. I bet the ballot initiative didn't mention an income level being applied.

You are right LauraC! The ballot did NOT mention that. But even still, I think it is a great idea, I hate to see retired folks that are on a fixed income get taxed right out of their house, it is wrong and I am glad the government is stepping in and doing at least something about it.

[Brbrbrgn]

We purchased property in July & were totally unaware of this. My Husband just retired & one of the reasons we are moving out of cental Fl is because taxes (well everyhing) have gone up so much. I know Tn is going to be a great place to live!

[Dee74]

Since TN taxes this income and for most retirees this is primary income, have you moved your $ to tax exempt investments? Or in other words are the taxes coming up equal to living in a state with moderate income taxes? On the state sales tax, since it is on everything including food is this proving more of burden than you expected?
In short is living in TN more of a benefit than not financially in your golden years?

[mrradio]

Moving to TN from NY was one of the best moves we ever made. Tax implications should only be one factor, not the decisive factor, in making a financial decision such as moving. That said, TN insurance rates, labor costs, property taxes, car fees, and general pricing levels for many goods are far below those of NY. Furthermore, TN does not tax pension income and has only a limited personal (income) tax on dividends, etc.. A one percent or so incremental addition to the sales tax rate over another taxing jurisdiction in another state, albeit very inclusive in TN, does not outweigh the savings I just mentioned.

Our property taxes in NY were over $12,000 a year. My neighbor's were $16,000. Those are not typo errors. Here they are $1,100 a year.

Our dollars go much further here in TN. They can keep NY. We love it here!

[TomFlint]

Tennesse is third from the lowest state for overall tax burden Vs. income (8.5%). While New York is third from the top (13.8%).

May not answer your question on how interest and divs are taxed.

Try this link:
Taxes by State

Tom