Maximizing Tax Savings for Properties in Nashville, TN

Nashville, Tennessee has become a popular destination for both tourists and residents alike. With its vibrant music scene, delicious food, and friendly community, it's no wonder that people are flocking to this city. And with the influx of people, the real estate market in Nashville has been booming. If you're considering investing in properties in Nashville TN, you may be wondering if there are any special tax incentives or programs available to help you save money.

As an expert in the real estate industry, I'm here to provide you with all the information you need.

The Basics of Property Taxes in Nashville

Before we dive into any potential tax incentives or programs, let's first understand the basics of property taxes in Nashville. In Tennessee, property taxes are calculated based on the assessed value of the property. This value is determined by the county assessor's office and is typically based on the market value of the property. The current tax rate for Nashville is $2.755 per $100 of assessed value. It's important to note that property taxes in Nashville are paid in arrears, meaning that they are paid at the end of the year for the previous year's taxes.

For example, if you purchase a property in 2021, you will pay property taxes for 2020.

Tax Incentives for Historic Properties

Nashville is known for its rich history and beautiful architecture. If you're lucky enough to own a historic property in Nashville, you may be eligible for some tax incentives. The city offers a Historic Property Tax Exemption Program which provides a 50% reduction in property taxes for properties that are designated as historic by the Metro Historical Commission. This program is designed to encourage the preservation of historic properties in Nashville. In order to qualify for this program, your property must be listed on the National Register of Historic Places or be located within a designated historic district.

You must also agree to maintain the property's historic character and not make any significant changes without approval from the Metro Historical Commission.

Tax Incentives for Green Homes

If you're interested in reducing your carbon footprint and saving money on your property taxes, you may want to consider investing in a green home in Nashville. The city offers a Green Development Incentive Program which provides a 50% reduction in property taxes for properties that meet certain green building standards. To qualify for this program, your property must be certified by a third-party green building program such as LEED or EarthCraft. The property must also meet certain energy efficiency and sustainability requirements. This program is a win-win for both the environment and your wallet.

Tax Incentives for Low-Income Housing

Nashville is committed to providing affordable housing options for its residents.

As such, the city offers a Low-Income Housing Tax Credit Program which provides tax incentives for developers who build low-income housing units. This program is designed to encourage the development of affordable housing in Nashville. Under this program, developers can receive a tax credit of up to 9% of the cost of building a low-income housing unit. These credits can then be used to offset their federal tax liability. This program not only benefits developers but also helps to address the issue of affordable housing in Nashville.

Tax Incentives for Commercial Properties

If you're looking to invest in commercial properties in Nashville, you may be eligible for some tax incentives as well.

The city offers a Commercial Rehabilitation Tax Credit Program which provides a tax credit of up to 25% of the cost of rehabilitating a commercial property. This program is designed to encourage the revitalization of commercial properties in Nashville. In order to qualify for this program, the property must be at least 50 years old and located in a designated commercial district. The rehabilitation project must also meet certain criteria, such as preserving the historic character of the building and improving its overall appearance. This program is a great way to save money while also contributing to the economic growth of Nashville.

Conclusion

As you can see, there are several tax incentives and programs available for properties in Nashville TN.

Whether you own a historic property, a green home, or a commercial property, there are opportunities for you to save money on your property taxes. It's important to do your research and see if you qualify for any of these programs before making any investment decisions. Remember, property taxes are just one aspect of owning a property in Nashville. It's also important to consider other factors such as location, market trends, and potential rental income. As an expert in the real estate industry, I highly recommend consulting with a professional before making any major investment decisions.