The Tennessee State Board of Equalization has recently published the 2009 Appraisal Ratios for each Tennessee county.

An appraisal ratio is the relationship of the Assessor’s appraisals compared to the sales prices of properties within the Assessor’s taxing jurisdiction. It is found by dividing the Assessor’s appraisal by the sale price and is expressed as a factor.

The State Division of Property Assessments makes the studies for each county and applies formulas and adjustments necessary to take into account market fluctuations. Sales not reflective of market value are discarded. The median percentage of all the sales comparisons is the appraisal ratio concluded for each county.

The appraisal ratios are recomputed for each county every two years.

Why are the appraisal ratios important?

They are of extreme importance in determining the amount of taxes paid by a taxpayer on a particular property.

If the taxpayer is able to prove market value of the property, the taxpayer may request that the appraisal ratio for the county where the property is located be applied to the property. If the ratio is less than 100, it will result in a reduction in the value, the assessment, and the resulting taxes.

For example, for 2008 the appraisal ratio for Davidson County was published at .8380. This means that the median of the Assessor’s appraisals compared to the sales prices for the period was 83.8%. If the taxpayer is able to prove that the market value of the property is say $1,000,000, the State will multiply the ratio to the value resulting in a new value of $838,000.

These ratios are also used to automatically adjust tangible personal property values before the bills are prepared. The ratios are applied to all tangible personal property assessments resulting from schedules that were filed with the Assessor on or before March 1st. Therefore, it is important to file this schedule timely if the ratio is below 100.

These ratios are valuable tools and helpful in obtaining adjustments in assessments in appeals.

Of course, following a county-wide reappraisal the Appraisal Ratio is usually 100. However, it will probably change in two years and there are other counties with ratios below 100.

The 2009 Appraisal Ratio list for each county may be viewed by Clicking Here