Taxes, Real Property

Plain English Breakdown

The candidate explanation includes claims about removing liability for rollback taxes when buyers do not continue the greenbelt classification, which are supported by the bill text but may be complex to understand fully without additional context.

Changes to Rollback Taxes for Agricultural, Forest, and Open Space Land

This act changes how rollback taxes are calculated and paid when agricultural, forest, or open space land is sold, conveyed, or transferred in Tennessee.

What This Bill Does

• Removes the requirement that a seller of greenbelt classified land must pay rollback taxes if the land is conveyed or transferred.
• Changes who is responsible for paying rollback taxes from both the current owner and seller to only the owner of the land.
• Eliminates the need for banks, savings and loan associations, or holders of deeds of trust or mortgages to be subject to rollback taxes when they acquire agricultural, forest, or open space land in satisfaction of a debt.
• Requires buyers of property classified as agricultural, forest, or open space land to submit a new application to renew the greenbelt classification after a sale.
• Removes liability for rollback taxes if the buyer does not continue the greenbelt classification.

Who It Names or Affects

• Owners and sellers of agricultural, forest, or open space land in Tennessee.
• Banks, savings and loan associations, and holders of deeds of trust or mortgages who acquire such land.

Terms To Know

Rollback taxes

Taxes that must be paid if agricultural, forest, or open space land loses its greenbelt classification due to a sale or transfer.

Greenbelt classification

A designation for land used for agriculture, forestry, or conservation purposes that allows it to be taxed at a lower rate based on its current use rather than its highest and best use.

Limits and Unknowns

• The bill does not specify the exact amount of revenue loss for local governments.
• It is unclear how this change will affect land values or property tax revenues in Tennessee.
• This act applies to property sold, conveyed, or transferred on or after July 1, 2026.

Official Summary Text

When a parcel of land has been classified by the assessor of property as agricultural, forest, or open space land, present law provides that it is subsequently considered that its current use for agricultural or timber purposes, or as open space used for
neither of these purposes, is its immediate most suitable economic use, and the assessment must be based upon its value in that current use, rather than on value for some other use.

CONVEYANCE OR TRANSFER OF THE LAND

Present law requires the appropriate assessor of property to compute the amount of taxes saved by the difference in the present use value assessment and the value assessment made under law relative to valuation, for each of the preceding three years for
agricultural and forest land, and for the preceding five years for open space land. Such assessor of property must notify the trustee that such amount is payable, if certain criteria is met. One such criteria is that the land is conveyed or transferred
an
d the conveyance or transfer would render the status of the land exempt from property taxes. This bill removes that criteria requirement.

ROLLBACK TAXES

Present law provides that the amount of tax savings calculated as described above are the rollback taxes due as the result of disqualification or withdrawal of the land from classification as agricultural, forest, or open space land. Rollback taxes must
be a first lien on the disqualified property in the same manner as other property taxes, and also be the personal responsibility of the current owner or seller of the land. This bill amends this provision to, instead, provide that such rollback taxes ar
e
the personal responsibility of only the owner of the land, not the seller.

If any land classified as agricultural, forest, or open space land, or any portion thereof, is acquired by a bank, a savings and loan association, or a holder of a deed of trust or mortgage in satisfaction or partial satisfaction of a debt previously con
tracted in good faith, present law prohibits such land, or any portion thereof, so acquired to be subject to rollback taxes assessed against or payable by the bank or savings and loan association. However, such land, or any portion thereof, is subject to
r
ollback taxes if the land is used for a non-green belt purpose or after such land is sold by the bank, savings and loan association, or holder of a deed of trust or mortgage. This bill removes the requirement for the land to be subject to such rollback t
axes.

SALE OF THE LAND

If the sale of agricultural, forest, or open space land will result in such property being disqualified as agricultural, forest, or open space land due to conversion to an ineligible use or otherwise, present law requires the seller to be liable for roll
back taxes, unless otherwise provided by written contract. If the buyer declares in writing at the time of sale an intention to continue the greenbelt classification but fails to file any form necessary to continue the classification within 90 days from
th
e sale date, the rollback taxes become the sole responsibility of the buyer.

This bill removes the provisions in the above paragraph and, instead provides that the sale of agricultural, forest, or open space land will result in the property being disqualified as agricultural, forest, or open space land. A buyer of property class
ified as agricultural, forest, or open space land must submit a new application to renew the property's classification as agricultural, forest, or open space land. There is no liability for rollback taxes resulting from the sale and subsequent disqualifi
ca
tion of property as agricultural, forest, or open space land, regardless of whether the greenbelt classification is renewed by the buyer.

APPLICABILITY

This bill applies to property sold, conveyed, or transferred on or after July 1, 2026.

Current Bill Text

SENATE BILL 1824
By Lowe

HOUSE BILL 1846
By Butler
HB1846
009967
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
11-14-307; Section 11-14-406; Section 11-7-109;
Title 66; Section 67-4-409; Title 67, Chapter 5,
Part 10 and Section 67-5-2402, relative to rollback
taxes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-5-1008(d)(1), is amended by
deleting the following language:
(D) An owner fails to file an application as required by this part;
(E) The land exceeds the acreage limitations of § 67-5-1003(3); or
(F) The land is conveyed or transferred and the conveyance or transfer would
render the status of the land exempt.
and substituting instead the following:
(D) An owner fails to file an application as required by this part; or
(E) The land exceeds the acreage limitations of § 67-5-1003(3).
SECTION 2. Tennessee Code Annotated, Section 67-5-1008(d)(3), is amended by
deleting the language "personal responsibility of the current owner or seller of the land as
provided in this part" and substituting instead the language "personal responsibility of the owner
of the land as provided in this part".
SECTION 3. Tennessee Code Annotated, Section 67-5-1008(e)(3), is amended by
deleting the language ", and shall be subject to rollback taxes, only if the land is used for a non-
green belt purpose or after such land is sold by the bank, savings and loan association or a
holder of a deed of trust or mortgage and then only as provided in subsection (d)".

- 2 - 009967

SECTION 4. Tennessee Code Annotated, Section 67-5-1008(f), is amended by deleting
the subsection and substituting instead the following:
(f) The sale of agricultural, forest, or open space land will result in the property
being disqualified as agricultural, forest, or open space land. A buyer of property
classified as agricultural, forest, or open space land must submit a new application in
accordance with this part to renew the property's classification as agricultural, forest, or
open space land. There is no liability for rollback taxes resulting from the sale and
subsequent disqualification of property as agricultural, forest, or open space land,
regardless of whether the greenbelt classification is renewed by the buyer.
SECTION 5. This act takes effect July 1, 2026, the public welfare requiring it, and
applies to property sold, conveyed, or transferred on or after that date.