Periodic County-Wide Reappraisal
Reappraisal of property for tax purposes is required on a periodic
basis to maintain appraisals at market value and to ensure equity of
appraisals throughout the jurisdiction. Every county in Tennessee is on
either a four, five, or six year cycle of reappraisal. Montgomery County
is on a five year plan.
The five year cycle consists of four years of comprehensive on-site
review of every parcel of property in the county, followed by
revaluation of all property in the fifth year. During each of those
first four years, approximately 20% of the parcels in the county are
inspected for changes to the land or buildings that would influence the
value of the property. Quarterly progress reports are provided to the
State of Tennessee’s Division of Property Assessments, whose personnel
also periodically monitor the progress and results of the on-site review
process.
After the first two years (the mid point of the cycle), an in-depth
statistical analysis is performed comparing sales prices to appraisals.
If the county’s overall level of appraisal has fallen to below 90% of
fair market value, property values will be updated county-wide by what
is known as a Current Value Update or CVU. In addition, even if the
level of overall appraisal has not fallen below the 90% threshold, any
subclass of properties (residential, farm, commercial, etc.) that is
found to be more than 10% below the county’s overall ratio will have its
values raised to reflect that overall county level.
In the fifth and final year of the cycle, a thorough analysis of the
current real estate market is used to establish new land and building
values. This is an exhaustive process that sets the factors, tables, and
base rates that will be used to value real property for the following five years. The changes in values are then applied to each property in
the county and those property owners whose values have either increased
or decreased as a result are notified as to the new appraisal of their
properties. Also during this fifth year, the complete plan of
reappraisal for the next five year period has to be developed and
submitted for approval, to include budgetary considerations for
personnel and equipment, and the territorial division of the county for
the four years of field review. The cycle then begins all over again.