Stop Tax Hikes on Tennessee Homes

The Housing Opportunity Coalition is committed to stopping a +60% property tax increase on single-family homes and defending the property rights of Tennesseans.

Understanding the crisis

In the past year, tax collectors across our state have started to violate 50 years of policy clearly stated in our constitution:  that single-family homes should be taxed as residential property (Tennessee Constitution, Article II, Section 28).  

“Residential Property, [is] to be assessed at twenty-five (25%) per cent of its value,” provided that the property does not contain “two (2) or more rental units,” which is “defined as industrial and commercial property.”

Now, some county tax collectors are seeing dollar signs.  Despite no new law or constitutional amendment, some county tax collectors are reclassifying single-family rental homes as commercial properties, raising rates from 25% to 40% of home values.

Tax collectors claim this broad tax increase is based on one judge’s recent ruling to apply the “commercial” tax rate to timeshares in a condominium building, which has multiple residences per building. 

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The Imact On US

This “reclassification” scheme will ruin housing affordability in our neighborhoods, flout our longstanding property tax law, and raise property taxes by 60% -- a tax increase of about +$1,200 on the average home every year.  

Such a drastic shift raises costs for families and individuals who rent and property managers. 

Collectively, it will hurt our local economies, chase away needed investment for our housing shortage, and limit housing options for Tennesseans who choose to rent.

  • Local tax collectors are applying new tax rules without legislative oversight or public input, violating the basic principle that tax policy should be debated and decided by representatives of the people.

  • Reclassification would force local governments to repeatedly revalue the same property when a homeowner decides to rent it out.  This revaluation triggers an avalanche of appeals, changing value methods, and creating costly legal and administrative burdens for counties and property owners alike.

  • Property owners’ fundamental rights are threatened when the government can, on a whim, change how their homes are taxed.  We have the right to live, sell, or rent out our private property, and carry out any legal activities.  This lack of due process undermines certainty and stability in homeownership.

 

The impact on your community

  • Higher Housing Costs

    The projected 60% tax hike on single-family rentals will inevitably lead to higher rents, making housing less affordable for working families across Tennessee.

  • Fewer Homes for Tennesseans

    When many property owners sell their rental homes or convert them to other uses in the face of skyrocketing tax bills, it sets off a chain reaction. Families renting homes would be evicted, rental home prices would go through the roof as supply dwindles but demand goes up, and Tennessean families have fewer housing options than ever before.

  • Economic Uncertainty

    Constant reclassification and revaluation create an unpredictable business environment, meaning losing jobs and destabilizing communities.

  • Strain on Small Property Owners

    Small “mom and pop” landlords, who provide the bulk of affordable rental options, are particularly vulnerable to large tax increases and may be forced to exit the market entirely.

Our mission is simple

Advocate for fair, consistent property tax policies that protect Tennessee homeowners and renters from unpredictable tax hikes, preserve private property rights, and keep housing affordable.

  • We Demand: Tennessee lawmakers close any perceived loopholes or ambiguity that allows tax collectors to create inconsistent and unfair property reclassifications.

  • The Benefits:  Lower and stable costs for housing, more housing choices, preserved property rights, lower taxes, and thriving communities.