Buying a new home? Here's how to calculate your property tax!

When talking to first-time home buyers, one of the constants I’ve come across has been the overall shock many feel at the amount of property tax they end up paying. There are always underlying expenses with most purchases, and home buying is no different. If you have already purchased a home and are now looking to move, you likely understand how property taxes work. However, if you’re still a bit confused or if you’re looking around for your first home, here is how to calculate your property tax in Memphis.

Varying Taxes

When moving to Memphis, it is important to note that there are both county and city taxes. I’ve found that when determining taxes, many first-time home buyers will come up with one, but not the other, which is why they are surprised come tax time when they need to pay both city and county taxes.

Currently, for 2018, the Shelby County property tax for a home’s appraised value is 4.05 percent. Additionally, the city tax rate for Memphis is another 3.19 percent.

Should you move to the county but live outside of Memphis, there are reduced tax rates in neighboring cities. The tax rates for these cities are as follows:

  • Arlington – 1.15 percent
  • Barlett – 1.83 percent
  • Collierville – 1.83 percent
  • Germantown – 1.95 percent
  • Lakeland – 1.25 percent
  • Millington – 1.53 percent

Tax Rate Calculator

To start, you need to know what your 2018 appraised value is. If you are buying a home, you should have the property appraised. The appraised value is not always what you end up paying for it. If there is a bidding war for the home, you may end up paying more than the current value of the property. In this instance, the appraisal will show that you owe less than what you paid for it.

Once you have the appraised value, it’s easiest to start with the county property taxes. For example, if your property was appraised for $150,000, you will multiply it by 4.05 (or 150,000 x 0.0405). This comes out to $1,518.75 for the county property taxes.

Next, you need to determine your city property tax. We will use the Memphis tax rate of 3.19 (if you live right on the city line, it is important to know what side of the street the line is on. It may be the difference of nearly two percent). Using the same calculation method of $150,000 for the property value, you will multiply it by 3.19 (150,000 x 0.0319). This comes out to $1,196.25.

So someone who owns a home with an appraised property value of $150,000 and lives within the city of Memphis will end up paying $2,715 for their home.

Hopefully, this helps you out with determining your property value taxes and what to expect come tax time.

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