Status
TML, in conjunction with Tom Fleming, Assistant to the Comptroller for Assessments, conducted a series of statewide property tax freeze workshops from November 28 - December 6, 2007. The meetings were designed to inform municipal officials of the guidelines and requirements of the new tax freeze program and the potential impact on cities that adopt the program.
On November 21, 2007, the state Attorney General opined (Opinion No. 07-156) that the state’s constitution stipulates that homeowners who are totally and permanently disabled, irrespective of age, also qualify for the property tax freeze. Therefore, any city adopting the tax freeze for the elderly must also make the benefit available to the totally and permanently disabled.
On September 26, 2007, the State Board of Equalization approved the Public Necessity Rules for the Property Tax Freeze Program. The rules became effective on August 29, 2007, and are effective through February 10, 2008.
Background
In November of 2006, Tennessee voters approved a constitutional amendment providing for local property tax relief for homeowners 65 years of age and older. Last session, legislation was formulated authorizing the seniors’ property tax relief program. TML and the counties were consulted throughout the process and, collectively, we shared our concerns and opinions regarding the administration and implementation of the tax freeze program.
Ultimately, the General Assembly adopted Public Chapter 581 which enacted the “Property Tax Freeze Act.” On September 26, the State Board of Equalization adopted the final regulations that will govern the administration and implementation of the tax freeze program.
Provisions
Homeowners qualifying for the program will have the property taxes on their principal residence frozen at a base tax amount, which is the amount of taxes owed in the year they first qualify for the program. Thereafter, as long as the owner continues to qualify for the program, the amount of property taxes owed for that property will not change, even if there is a property tax rate increase.
In order to qualify, the homeowners must file an application annually and must:
- Own their principal place of residence in a participating county and/or city
- Be 65 years of age or older by the end of the year in which the application is filed
- Have an income from all sources that does not exceed the county income limit established for that tax year
In counties or municipalities participating in the Tax Freeze Program, application may be made to thecountyTrustee or city collecting official.
The state Comptroller’s Office will calculate the income limit for each county annually, using a formula outlined in state law.
Situations where the base tax amount would change for a homeowner are:
- When improvements are made to the property resulting in an increase in its value
- When the homeowner sells the home and purchases another residence
The tax freeze is available only on the principal place of residence of the qualifying homeowner located in a participating county or city.
