, is 1.38%, which means the typical homeowner owes around $1,872 a year. As compared with the state average of 0.68%, some residents of the county may see bills twice as large as those with similarly priced homes in other areas of Tennessee.

But it’s not all bad news! Property taxes can vary, sometimes greatly, within each county. Plus, many factors affect your annual tax bill, including the assessed value of your home, the economic conditions of your area, and whether or not you live in a special tax district.

We know property taxes can be confusing at times. So here to tell you what they are, how they work, and how they may affect you is home and

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Property tax 101

Here are the basics: property tax—also known as real estate tax—is a tax placed on your private property, which includes your house and the land itself.

These taxes go toward state and local governments to fund their budgets, which pay for employees and the services they provide. This includes things like schools and the fire department.

State and local governments determine tax rates based upon the needs of their budget and the value of real estate in the area. These rates can change over time as conditions change.

MORE: Is car insurance tax deductible?

What is the property tax rate in Shelby County?

The average tax rate across the county is 1.38%, which is over double that of the state average of 0.68%. The typical homeowner can expect to pay around $1,872 a year in property taxes.

There are discounts available for certain residents. For example, senior citizens who make less than $31,190 a year can see reduced rates on their property taxes. Other discounts are available for disabled veterans and spouses of soldiers killed in action. To see if you are eligible for these and any other discounts, visit the

Shelby County Trustee’s Tax Relief website

How Shelby County property taxes are determined

If you live in Shelby County, here is how your property taxes rates are calculated.

First, you need your local tax rate. These rates fluctuate, as there are many different school districts and tax zones throughout the county. The best way to figure out your tax rate is to use the County Trustee’s

Tax Look-Up tool

. Here, you can enter your address or parcel ID number (found on your tax bill), and the tool will inform you of what taxes your property is subject to.

Next, is the assessed value of your home. Each property in the county is reviewed by the County Assessor, which assigns a fair market value to the property. This is defined as the value at which your home would sell in the current market. If you do not agree with the valuation given by the assessor, you may appeal to the

Board of Equalization

Finally, each property is taxed at different rates depending upon its classification. The classifications in Shelby County are:

Residential (25%)

Farm (25%)

Commercial (40%)

Industrial (40%)

So, how does all this work? Let’s say you live in a residential home assessed to be worth $200,000 with a local tax rate of 1%. In this case, your annual property tax would be 200,000 (home worth) x .01 (1% tax) x .25 (residential discount), which comes out to a tax bill of $500 a year.

What do Shelby County property taxes pay for?

State and local government get a large portion of their budgets from property taxes, which is a good thing because all of that money is funneled right back into the community to pay for things like:

Public schools and teachers

Police, Fire, and EMS departments

Garbage collection

Sewage, water, and power services

Libraries

Parks and public spaces

Highway and transportation safety

MORE: How to deduct a car accident from your taxes

How to pay property taxes in Shelby County

Shelby County property taxes become due the first Monday in October of each year. Taxes may be paid through the last day of February of the following year without additional fees.

The County Trustee offers several methods of payment for your annual property taxes. Take a look below to see your options:

Online: You may pay online in two ways—through the

Trustee’s website

or the

payit901

app available on iTunes and Google Play. Credit card payments may incur a fee.

By mail: Make check or money order payable to Shelby County Trustee. Any mailed payments must be postmarked on or before the last day in February to avoid interest. Mail the payment, along with the detached bottom portion of the Tax Notice, to: Shelby County Trustee, P.O. Box 2751 Memphis, TN 38101-2751.

Through your mortgage: Many lenders offer customers the option to pay their property tax bill through their home mortgage. Reach out to your mortgage lender for specifics on how their program works.

MORE: Tennessee Electric Vehicle Incentives

How to save money on homeowners and car insurance in Tennessee

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