Official Summary Text
This bill provides that t
he general assembly finds
that
the use of assessment manuals for the valuation of residential properties tends to lead assessors of property to provide speculative and inflated values, rather than the actual value of the property.
Instead, this bill provides that t
he value of all residential property is the higher of
t
he most recent price paid for the property
,
or
t
he value attributed to the property by a financial institution when the owner refinances the mortgage on the property
or otherwise uses the property as collateral for a loan.
Such valuation
applies to sales or financial institution appraisals that occur after December 31, 2020.
However, t
he appraised value of residential properties appraised by the assessors of property on or before December 31, 2026, is the appraised value for tax purposes until the residential property is sold or a financial institution attributes a value to the propert
y for use as collateral for a loan.
HOMESTEAD EXEMPTION
Present law provides that a
n individual, whether a head of family or not,
is
entitled to a homestead exemption upon real property which is owned by the individual and used by the individual or the individual's spouse or dependent, as a principal place of residence.
The aggregate value of such exemption
must generally
not exceed $35,000
. However,
(i)
individuals who jointly own and use real property as their principal place of residence
are
entitled to
such
exemptions, the aggregate value of which exempti
ons combined
must
not exceed $52,500,
to
be divided equally among them in the event the exemptions are claimed in the same proceeding;
and (ii)
if only one of the joint owners of real property used as their principal place of residence is involved in the proceeding wherein
the
exemption is claimed, then the individual's homestead exemption
must
be $35,000.
Such
exemption
is
not subject to execution, attachment, or sale under legal proceedings during the life of the individual.
Upon the death of an individu
al who is head of a family, such exemption inure
s
to the benefit of the surviving spouse and their minor children for as long as the spouse or the minor children use such property as a principal place of residence.
Present law prohibits a
homestead exemption
from
operat
ing
against
(i)
public taxes
, (ii)
debts contracted for the purchase money of such homestead or improvements thereon
,
or
(iii)
any debt secured by the homestead when the exemption has been waived by written contract.
Relative to (i) in the prior paragraph, this bill authorizes a homestead exemption to operate against public taxes according to either of the following situations:
F
or a principal place of residence of a United States citizen for debt related to real property tax, the exemption is the full value of the homestead.
F
or a parcel that has been used as a principal place of residence by an owner who is a United States citizen for 10 or more years
, (i) such parcel
cannot be sold to satisfy a debt
; (ii)
t
he owner of
the
parcel seeking to prevent a tax sale of the parcel must provide evidence of the use of the parcel as a principal place of residence for the requisite period and proof of United States citizenship
; (iii)
o
nce it is determined that the parcel has been used as a principal place of residence for the requisite period, interest does not accrue on the debt
; and (iv) t
he debt becomes due and payable upon the transfer of the property to another owner.
Current Bill Text
Read the full stored bill text
SENATE BILL 2411
By Hensley
HOUSE BILL 1716
By Fritts
HB1716
008713
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 26
and Title 67, relative to property taxes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-5-601(c), is amended by deleting
the subsection and substituting instead:
(c)
(1) The general assembly finds that the use of assessment manuals for the
valuation of residential properties tends to lead assessors of property to provide
speculative and inflated values, rather than the actual value of the property.
(2) The value of all residential property is the higher of:
(A) The most recent price paid for the property; or
(B) The value attributed to the property by a financial institution when the
owner refinances the mortgage on the property or otherwise uses the property as
collateral for a loan.
(3) This subsection (c) applies to sales or financial institution appraisals that
occur after December 31, 2020. The appraised value of residential properties appraised
by the assessors of property on or before December 31, 2026, is the appraised value for
tax purposes until the residential property is sold or a financial institution attributes a
value to the property for use as collateral for a loan.
SECTION 2. Tennessee Code Annotated, Section 26-2-301(c), is amended by deleting
the subsection and substituting instead:
(c) The homestead exemption shall not operate against public taxes, except as
provided in subsection (e) and § 67-5-2501(d), nor shall the exemption operate against
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debts contracted for the purchase money of such homestead or improvements thereon,
nor shall the exemption operate against any debt secured by the homestead when the
exemption has been waived by written contract.
SECTION 3. Tennessee Code Annotated, Section 26-2-301, is amended by adding the
following as a new subsection:
(e) Notwithstanding another law to the contrary, the homestead exemption for a
principal place of residence of a United States citizen for debt related to real property tax
is the full value of the homestead.
SECTION 4. Tennessee Code Annotated, Section 67-5-2501, is amended by adding
the following as a new subsection:
(d)
(1) Notwithstanding another law to the contrary, a parcel that has been used as
a principal place of residence by the owner who is a United States citizen for ten (10)
years or more cannot be sold to satisfy a debt under this part.
(2) The owner of a parcel seeking to prevent a tax sale of the parcel shall
provide evidence of the use of the parcel as a principal place of residence for the
requisite period and proof of United States citizenship.
(3) Once it is determined that the parcel has been used as a principal place of
residence for the requisite period, interest does not accrue on the debt.
(4) The debt becomes due and payable upon the transfer of the property to
another owner.
SECTION 5. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
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SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.