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.