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To look up a term, select the beginning
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A
ACRE: A land measure equal to 43,560
square feet.
AD VALOREM TAX: A real estate tax levied in proportion to the value
of the property; a property tax based on value.
APPEALS PROCESS: The procedures established by the Tennessee Code
for appealing the valuation/classification of properties. Normally the
sequence of events starts with an informal appeal to the Assessor, to the
local Board of Equalization, the State Board of Equalization and finally
the court system.
APPRAISAL (or APPRAISED VALUE): An opinion of value based upon
market conditions.
APPROACHES TO VALUE: Valuation methods used in appraisal to
determine property value. The three common approaches for real property
are the cost approach, income approach and market (comparable sales)
approach.
ARMS-LENGTH TRANSACTION: A sale between two unrelated parties with
each seeking to maximize his/her/its position from the transactions.
ASSESSED VALUE:
A value set on real and personal property by a government as a basis for
levying taxes. The appraised value is multiplied by the legal
assessment ratio. The legal assessment ratios for Tennessee are:
Residential and Farm 25%; Commercial and Industrial 40%; Commercial and
Industrial Personal Property 30%; Public Utilities 55%.
ASSESSMENT: The valuation of property for tax purposes. In
Tennessee this is the appraised value multiplied by the percentage ratio
applied to the classification of the property. (For example: Under
Tennessee law, the percentage applied to a Residential classification
property is 25% of the appraised value while that applied to a
Commercial/Industrial property is 40%. A residential property
appraised at $100,000 would be assessed at $25,000 while a commercial
property of the same appraisal would be assessed at $40,000.)
ASSESSMENT CHANGE NOTICE: A notice sent
normally in May of the tax year to the property owner of agent of any
change in assessed value.
ASSESSMENT RATIO: The
fractional relationship an assessed value bears to the market value of the
property in question. Example: Residential/Farm property is
assessed at 25% of the appraised value.
ASSESSMENT ROLL: A listing of all property and its assessed value
ASSESSED VALUE: The property value determined by the Assessor and
used by the Trustee to compute property taxes by applying the applicable
tax rate.
ASSESSMENT YEAR: In Tennessee, the effective date of assessment is
January 1 of each year and the appraisal represents the value of the
property on that date.
ASSESSOR: The publicly elected official whose legal responsibility
it is to discover, list and appraise all property in the applicable
jurisdiction.
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B
BOARD OF EQUALIZATION (or BOE): A nonjudicial, appointed
body which attempts to ensure that property under its jurisdiction is
appraised equitably and at market value. In Davidson County, the
local BOE is appointed by the Metropolitan County Mayor and confirmed by
the Metropolitan County Council. On the State Level, the board consists of
state officers and appointees of the Governor.
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C
CAMA: An acronym for Computer-Assisted Mass Appraisal, the process
by which property is appraised utilizing computers, computer models and
analytical programs. In Davidson County, a software product named
AssessPro from Patriot Properties Inc., is used as a CAMA application.
CLASSIFICATION: Categories of property established by Tennessee Law
to distinguish the use of property for purposes of assessment,
equalization and taxation.
COMPARABLES (or COMPS): A shortened term for similar property
sales, rentals, or operating expenses used for comparison in the valuation
process.
COST APPROACH: Estimates property value by determining replacement
cost new, less depreciation, plus the land value.
COMPARABLE
SALES APPROACH: (See Market Approach)
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D
DEPRECIATION: 1. In appraising, a
loss in property value from any cause; the difference between the
reproduction or replacement cost of an improvement on the effective date
of the appraisal and the market value of the improvement on the same date;
2. In regard to improvements, depreciation encompasses both deterioration
and obsolescence.
DETERIORATION: Impairment of condition; a cause of depreciation
that reflects the loss in value due to wear and tear, disintegration, use
in service, and the action of the elements.
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E
EQUALIZATION: The process by which an appropriate governmental body
attempts to ensure that all property under its jurisdiction is assessed
equitably at market value or at a ratio or ratios as required by law.
ESTIMATED TAX: An amount calculated by multiplying the assessed
value by the prior year's levy.
EXEMPT PROPERTY: Property used
for governmental, charitable, educational or religious purposes and
determined by the State Board of Equalization to be exempt from payment of
the property tax.
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F
FLOODPLAIN: The area along the course of a river, stream or other
body of water that is subject to overflow or flooding. The
floodplain may be altered by re-sculpturing of the land.
FLOODWAY: The area along the
course of a river, stream or other body of water that is subject to
overflow or flooding and may not be altered or developed.
FORECLOSURE: The legal process in which a mortgagee forces the sale
of a property to recover all or part of a loan on which the mortgagor has
defaulted.
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G
GENERAL SERVICES DISTRICT (or GSD):
A tax district distinctly identified geographically and comprised of all
parcels within the jurisdictional boundaries of Davidson County.
GRANTEE: A person to whom property is transferred by deed or to
whom property rights are granted by a trust instrument or other document.
GRANTOR: A person who transfers property by deed or grants property
rights through a trust instrument or other document.
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H
HIGHEST AND BEST USE: The reasonable, probable, and legal use of
vacant land or an improved property, which is physically possible,
appropriately supported, financially feasible, and that results in the
highest value. The four criteria the highest and best use must meet are: legal permissibility, physical possibility, financial feasibility, and
maximum profitability.
HOMEBELT: A residential
property that is zoned commercially and occupied by an owner or their
lineal descendants for a period of 25-years at least 9-months of each
calendar year. The maximum land size is 5-acres.
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I
IAAO: International Association of Assessing Officers, a
professional organization for Assessors and their employees which promotes
the highest standards of conduct, offers training in acceptable methods of
appraisal, and provides testing of expertise for purposes of
certification.
IMPROVEMENTS: All buildings, structures, pools, fences, etc., fixed
to the land. For example, a house built on a vacant lot is considered an
improvement of the lot.
INCOME APPROACH: An appraisal method in which the property is
valued according to its ability to produce income.
INDUSTRIAL PROPERTY: Land and/or improvements that can be adapted
for industrial use; a combination of land, improvements, and machinery
integrated into a functioning unit to assemble, process, and manufacture
products from raw materials or fabricated parts.
INSTRUMENT: In real
estate, a formal, legal document, e.g., a contract, a deed, a lease, a
will.
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J
JURISDICTION: (1)The right and
power to interpret and apply the law; also, the power to tax and the power
to govern. (2) The
territorial range of authority or control.
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L
LEGAL DESCRIPTION: A statement in words or codes identifying land
for all purposes of law.
LESSEE: one that holds real or personal property under a
lease.
LESSOR:
one that conveys property by lease.
LOT: 1. A distinct piece of land; a piece of land that forms a part
of a district, community, city block, etc.; 2. A smaller portion into
which a city block or subdivision is divided; described by reference to a
recorded plat or by definite boundaries; a piece of land in one ownership,
whether platted or not.
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M
MAPPING: The process of creating maps from recorded documents such
as deeds and subdivision plats.
MARKET APPROACH: Estimates property value by comparison to similar
properties that have sold in the open market.
MARKET VALUE: The most probable price, as of a specified date, in
cash, or in terms equivalent to cash, or in other precisely revealed terms
for which the specified property rights should sell after reasonable
exposure in a competitive market under all conditions requisite to a fair
sale, with the buyer and seller each acting prudently, knowledgeably, and
for self-interest, and assuming that neither is under undue duress.
MASS APPRAISAL: The process of valuing a universe of properties as
of a given date utilizing standard methodology, employing common data, and
allowing for statistical testing.
MATERIAL VALUE (Mat Value): An
appraisal of the value of materials in place on an incomplete improvement
as of January 1 of the tax year.
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N
Neighborhood: A study of
relevant forces that influence property values within the boundaries of a
homogeneous area.
NET INCOME AND NET OPERATING INCOME (NOI): The
income expected from a property, after deduction of allowable expenses.
The net annual income is the amount generated by a property after
subtracting vacancy and collection loss, adding secondary income, and
subtracting all expenses required to maintain the property for its
intended use. (Does not include payments for interest or principal).
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O
OBSOLESCENCE: One cause of depreciation; an impairment of
desirability and usefulness caused by new inventions, changes in design,
improved processes for production, or other external factors that make a
property less desirable and valuable for a continued use; may be either
functional or external.
OWNER (or OWNER OF RECORD): The owner of title to a property
as indicated by public records.
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P
PARCEL: A piece of land of any size in one ownership.
PARCEL NUMBER: A numeric or alphanumeric description of a parcel
that identifies it uniquely.
PERSONAL PROPERTY (or PERSONALTY): Identifiable portable and
tangible objects that are considered by the general public to be
"personal", e.g., furnishings, artwork, antiques, gems and jewelry,
collectibles, machinery and equipment; all property that is not classified
as real estate. Personal property includes movable items that are not
permanently affixed to, and part of, the real estate.
PLAT: 1. A plan, map, or chart of a city, town, section, or
subdivision indicating the location and boundaries of individual
properties; 2. A map or sketch of an individual property that shows
property lines and may include features such as soils, building locations,
vegetation, and topography.
PRORATE: An appraisal that
reflects any changes made to improvements located on a property due to new
construction or demolition that occurs after January 1 and before
September 1 of the tax year.
PRORATE NOTICE: A notice sent
by the assessor's office notifying the property owner of the change in
value resulting to the improvements that have occurred between January 1
and September 1 of the tax year.
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Q
QUITCLAIM DEED: A form of conveyance in which any interest the
grantor possesses in the property described in the deed is conveyed to the
grantee without warranty of title.
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R
REAPPRAISAL: The mass appraisal of all property within an
assessment jurisdiction normally accomplished within a given time period,
also called revaluation or reassessment. In Davidson County, all property
is reappraised at least every four years.
REAL PROPERTY: Land and improvements to the land.
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S
SALES COMPARISON APPROACH: (See
Market Approach)
SALES RATIO: The ratio of an appraised value
to the sale price or adjusted sale price of a property. The
appraised value is divided by the sale price to determine the individual
ratio.
SATELLITE CITIES: Municipalities
that lie outside the Urban Services District, but entirely or
partially within the General Services District and which may levy an ad
valorem tax that is based upon the assessments established for Davidson
County; These jurisdictions also may establish their own zoning codes or
provide additional services above those normally available to property
owners of the General Services District outside the Urban Services
District.
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T
TAXABLE VALUE: Taxable value is the value of property as determined
by the Assessor using methods proscribed by Tennessee Statute and Board of
Equalization rules. Generally speaking, taxable value of real property is
the appraised value of the land and the current replacement cost of
improvements less statutory depreciation.
TAX BASE: Total assessed value in
a given tax district.
TAX CODE: Indicates which taxing
entities will receive revenues generated from property taxes levied
against this property.
TAX EXEMPTIONS: Those qualified individuals, as stipulated in
Tennessee State Code, entitled to an exemption of a specified amount of
Assessed Value. Those who are blind, disabled, widows or widowers and
disabled veterans may be eligible for this assistance.
TAX EXEMPT PARCELS: Tennessee law exempts all property owned by
federal, state and local governments from taxation. This includes property
for schools, parks, libraries, government buildings, roads, airports,
military installations and other public areas. The law also exempts
churches and some other charitable organizations.
TAX RELIEF: Elderly and Disabled
citizens and Disabled Veterans may qualify for tax relief. Elderly is
considered to be persons 65 or older prior to the end of a tax year;
Disabled is considered to be totally and permanently disabled as rated by
the Social Security Administration or other qualified agency before the
end of the tax year. In either case, the combined income for all owners
of the property must not exceed $12,210. Disabled veterans for this
purpose also must be considered 100% disabled.
TAX ROLL: A listing of real
property parcels which includes information about parcel ownership and
mailing address, property location, land use and valuation.
TITLE: All of the elements
that constitute the legal right to own, possess, use control, enjoy and
dispose of real estate.
TITLE COMPANY: The
entity that ensures the title for the owner of the property.
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U
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (or USPAP):
Current standards of the appraisal profession, developed for appraisers
and the users of appraisal services by the Appraisal Standards Board of
The Appraisal Foundation. The Uniform Standards set forth the procedures
to be followed in developing an appraisal, analysis, or opinion and the
manner in which an appraisal, analysis, or opinion is communicated. They
are endorsed by the Appraisal Institute and by other professional
appraisal organizations, such as the IAAO.
URBAN SERVICES DISTRICT (or USD):
A tax district distinctly identified geographically and comprised of
parcels emanating from the downtown Nashville area which has more
concentrated or unique governmental services provided by the Metropolitan
Government when compared with the General Services District, which
includes all parcels within the jurisdictional boundaries of Davidson
County.
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V
VALUATION: The process of estimating the market value, insurable
value, investment value, or some other properly defined value of an
identified interest or interests in a specific parcel or parcels of real
estate as of a given date. Valuation is a term used interchangeably with
appraisal.
VALUE: 1. The monetary worth of a property, good, or service to
buyers and sellers at a given time; 2. The present worth of the future
benefits that accrue to real property ownership.
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W
Weighted Mean: Sum of the
appraised values divided by the sum of the sale prices which weights each
value in proportion to its sale price.
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Z
ZONING: The categorizing of property for
permitted use and the allowed characteristics of use by a government body,
such as the Metropolitan Planning Commission, subject to the approval of
the Metropolitan County Council.
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If you need explanation of a term not
listed above, please write the Assessor's Office using the link below and
we will define the term for you and add to the listing.
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