Nashville’s Davidson County Shortens Property Appraisal Cycle

Davidson County is tightening the timeline on property reappraisals in an effort to reduce tax sticker shock for commercial and residential property owners.

Metro Nashville approved a measure to shorten the county’s reappraisal cycle from four years to three, with the change set to take effect July 1, the Nashville Business Journal reported.

The move follows a 45 percent jump in the median property value in the latest assessment and comes amid ongoing volatility in Nashville’s real estate market.

The county will begin reviewing properties and updating records on a three-year basis, and a shift to every-other-year reappraisals is on the table for future consideration. The plan was approved by the Mayor Freddie O’Connell’s office in April.

Two successive assessments produced steep value increases. The countywide reappraisal in 2021 jumped 34.1 percent in median value. This year’s leap of 45 percent reflects pandemic-era investment highs followed by a correction.

“Where these four-year assessment cycles become problematic is a time like today, because there were a lot of transactions since the last assessment year,” said George Schubert, a broker at Land Advisors, who noted that investors who bought properties during the 2021 run-up may now find appraisals out of step with market realities.

Nashville’s biggest office buildings collectively lost $397 million in appraised value, reflecting mounting distress in the sector as employers shed space and office investment slows.

Nashville’s fast-paced growth and development boom have made the four-year appraisal cycle outdated, some say, especially as rising interest rates and construction costs reshape underwriting models. Many major U.S. metros assess property values annually or every two years.

More frequent reappraisals may help smooth out dramatic year-to-year changes in tax bills. But they also mean more frequent updates to valuations that, for some owners, may still not reflect what the market’s willing to pay.

— Judah Duke