SUMNER COUNTY, Tenn. (WKRN) -- Rental properties in Sumner County could soon see a price jump. 

The potential increase comes after the county’s property assessor elected to increase the tax rate for single-family rental homes from 25% to 40%.

A 40% property tax rate is what commercial properties are set to in Tennessee, meaning Sumner County would be establishing a unified, higher-tax rate for all rentals.  

“Initially, the landlords will have to pick that cost up, but it will eventually be passed off to the tenants,” explained Danny Hale, property manager for Hendersonville’s HALO Realty. “Rental is a viable alternative for most people, so it’s just going to push the cost up on the people who can least afford to pay it.” 

A property owner who spoke at a county meeting on Monday said he was told the change was made to prevent large-scale rental companies from flooding their housing market. However, local property managers like Hale are weary of the fallout. 

“We’ve talked to several different property management companies in the area, and they’re all in agreement that this is outside the bounds of state law and that it’s not fair for those people and it’s going to put a hardship on the tenants,” said Hale. 

Hale has been a property manager in Sumner County for 30 years. He said he’s never seen tax assessments made based upon who owns the property, or how many rentals they own. 

Hale estimates that 5-7% of houses in Sumner County are rentals, with a great demand currently for single-family homes. 

Sumner County’s Property Assessor John Hurt was out of the office on Tuesday. News 2 emailed him for further comment. He responded with this statement:

Property is classified by its use in Tennessee. The previous Assessor, Don Linville, made the decision to classify income producing single family rentals as commercial and assess them at the 40% commercial rate in tax year 2024. 

These properties are not owner occupied and are being used as an income producing business by the owner. There are appeals for tax year 2024 regarding the classification that will be heard by a Judge later this year. The Court will  determine whether income producing single family rentals should be assessed at a more favorable assessment rate than other income producing property. Property owners may appeal their property classification to the Sumner County Board of Equalization. The deadline to sign up for the board is June 13th.

John Hurt

Sumner County’s Commission will vote later this month on whether to ask Hurt to pause this increased tax rate. 

“The county tax assessor is an elected official and doesn't answer to the county commission. So it’s really upon him how to decide how to interpret the law, and in this case, we think he’s misinterpreted it,” added Hale. 

News Source : https://www.wkrn.com/news/local-news/sumner-county-rental-properties-could-see-tax-hike/