New Property Tax Increase (Memphis: price, areas, county)

[bluffcity]

looking at Nashville property taxes, only half of that of Memphis's

[bluffcity]

when property value goes up, the tax rates never come down (maybe short term mandated by law but eventually they go up again)

[Tigertate]

Originally Posted by bluffcity

looking at Nashville property taxes, only half of that of Memphis's

Nashville has a much higher average property value than Memphis, so they can get the same amount of revenue at a much lowere tax rate. Memphis will never be able to get their rate that low without deannexing huge swaths of the city keeping the more affluent areas.

[tigerphan]

Originally Posted by Tigertate

Nashville has a much higher average property value than Memphis, so they can get the same amount of revenue at a much lowere tax rate. Memphis will never be able to get their rate that low without deannexing huge swaths of the city keeping the more affluent areas.

It's a bad cycle....in a way Memphis property values are also hurt by property tax increases. Increasing them decreases demand for housing within the city, reducing their average value, and undermines revenue.

[jaydarl]

Originally Posted by Tigertate

Nashville has a much higher average property value than Memphis, so they can get the same amount of revenue at a much lowere tax rate. Memphis will never be able to get their rate that low without deannexing huge swaths of the city keeping the more affluent areas.

A case in point on the low end of property values.

Comparing Memphis's and Nashville's similar lower income zip codes of 38106 & 37208 (based on income, just under $20,000), you can clearly see the discrepancy in property values. Lots in 38106 start at $1,500, lots in 37208 start around $9,000. Houses (basically tear downs in both), Memphis starts around $1,600, with the bottom settling between $5,000-$10,000; Nashville starts at $20,000, with the bottom settling between $35,000-$50,000. The high in Memphis is $75,000, whereas the high in Nashville is $380,000.

Using the middle of the bottom settling price $7,500 the tax is $146, in Nashville $42,500, the tax is $480.

[nashvols]

Originally Posted by jaydarl

A case in point on the low end of property values.

Comparing Memphis's and Nashville's similar lower income zip codes of 38106 & 37208 (based on income, just under $20,000), you can clearly see the discrepancy in property values. Lots in 38106 start at $1,500, lots in 37208 start around $9,000. Houses (basically tear downs in both), Memphis starts around $1,600, with the bottom settling between $5,000-$10,000; Nashville starts at $20,000, with the bottom settling between $35,000-$50,000. The high in Memphis is $75,000, whereas the high in Nashville is $380,000.

Using the middle of the bottom settling price $7,500 the tax is $146, in Nashville $42,500, the tax is $480.

I don't know anything about 38106, but it should be noted that 37208 includes the Germantown and Salemtown neighborhoods in Nashville, which have gentrified and the values are skyrocketing. It is creating somewhat of a ripple effect, too, in terms of sparking some gentrification in adjacent neighborhoods. There are still some really run down areas (obviously, as the price reflects)...but I am not sure that is the best possible comparison. A lot of the newer construction in Germantown is in the $200-400k range, topping out around $700k.

I get the comparison, just beware that the desirable, albeit small area of 37208, skews the numbers a bit.

[jaydarl]

Originally Posted by jaydarl

A case in point on the low end of property values.

Comparing Memphis's and Nashville's similar lower income zip codes of 38106 & 37208 (based on income, just under $20,000), you can clearly see the discrepancy in property values. Lots in 38106 start at $1,500, lots in 37208 start around $9,000. Houses (basically tear downs in both), Memphis starts around $1,600, with the bottom settling between $5,000-$10,000; Nashville starts at $20,000, with the bottom settling between $35,000-$50,000. The high in Memphis is $75,000, whereas the high in Nashville is $380,000.

Using the middle of the bottom settling price $7,500 the tax is $146, in Nashville $42,500, the tax is $480.

However, when it comes to upper-middle and higher-end housing I would think Memphis taxpayers pay a lot more than Nashville. Just a guess, haven't punched the numbers.

[jaydarl]

Originally Posted by nashvols

I don't know anything about 38106, but it should be noted that 37208 includes the Germantown and Salemtown neighborhoods in Nashville, which have gentrified and the values are skyrocketing. It is creating somewhat of a ripple effect, too, in terms of sparking some gentrification in adjacent neighborhoods. There are still some really run down areas (obviously, as the price reflects)...but I am not sure that is the best possible comparison. A lot of the newer construction in Germantown is in the $200-400k range, topping out around $700k.

I get the comparison, just beware that the desirable, albeit small area of 37208, skews the numbers a bit.

I'm somewhat familiar with 37208. My uncle pastors a church in the zip. The area surrounding his church is very similar to 38106 aesthetically and demographically. However, there isn't any gentrification anywhere near 38106, although some areas would be prime for it.

[tigerphan]

Originally Posted by jaydarl

However, when it comes to upper-middle and higher-end housing I would think Memphis taxpayers pay a lot more than Nashville. Just a guess, haven't punched the numbers.

Wouldn't shock me if you compared homes of similar value between the two cities and found that the Memphis taxpayer was paying much more.

[nashvols]

Originally Posted by tigerphan

Wouldn't shock me if you compared homes of similar value between the two cities and found that the Memphis taxpayer was paying much more.

That is definitely the case.

While the home values in Nashville are higher, the tax rate in Memphis is considerably higher than Nashville's.

Using the county property assessor websites:
Shelby County tax rate: $4.38
Memphis City tax rate: $3.40
total: $7.78

Davidson County tax rate: $3.924
Nashville Urban Services rate: $0.592
total: $4.516

Property taxes on a $75,000 house
Memphis: $1,458.75
Nashville: $846.75

Property taxes on a $150,000 house
Memphis: $2,917.50
Nashville: $1,693.50

Property taxes on a $225,000 house
Memphis: $4,376.25
Nashville: $2,540.25

Property taxes on a $300,000 house
Memphis: $5,835.00
Nashville: $3,387.00

Memphis residents seem to be getting screwed. Even with the average home price being higher in Nashville, it's not nearly to this ratio. A $175,000 house in Memphis has a higher tax ($3,403.75) than a $300,000 house in Nashville ($3,387.00). There's something wrong with that...