Farragut property taxes, explained: what newcomers need to budget for

Most of the relocation calls I take in May start the same way. A family is two weeks out from listing their house in California or Illinois, they've narrowed Knoxville down to Farragut, and somewhere in the conversation comes a careful question — how bad are the property taxes here? It's a fair question. It's also, almost always, asked with the wrong assumption underneath it.

Tennessee taxes property very differently from the states most of you are coming from, and Farragut is one of a small number of towns in the state that has no town property tax at all. The number that matters is smaller than you think, and the math is gentler than the headlines made you brace for. Here's what's actually in your budget.

The one-bill surprise: Farragut doesn't have a town property tax

Coming from a place where you stack city, county, and sometimes special-district levies on top of each other, the most useful thing I can tell you up front is this: in Farragut, you pay one property tax bill. To Knox County. That's it.

The Town of Farragut, by deliberate design, funds itself almost entirely with local-option sales tax and a few small fees. About sixty percent of the town's annual revenue comes from sales tax — Turkey Creek alone covers a lot of that — and the town carries no debt. The political agreement that created Farragut as a chartered town in 1980 included a promise that the town would not levy a property tax of its own. That promise has held for forty-six years.

What this means in practice: a homeowner in Farragut and a homeowner in unincorporated Knox County two miles away pay the same property tax. A homeowner inside the City of Knoxville limits pays both the Knox County rate and a separate City of Knoxville rate on top of it. Same school system. Same county. Different bill. That single fact is the reason a lot of relocation buyers I work with end up choosing inside the Town limits even when they had been open to nearby city addresses on Zillow.

What "appraised" and "assessed" actually mean here

The second mental shift, and the bigger one if you're coming from California or New York, is that Tennessee doesn't tax the full market value of your home. The state constitution sets a fixed assessment ratio for every class of property. Residential and farm are assessed at 25 percent of appraised value. Commercial and industrial are assessed at 40 percent. The rates the county sets — the ones you read about in the paper — are applied to that assessed value, not to your home's full appraisal.

Most people from out of state read a "$1.55 tax rate" and assume it means $1.55 per hundred dollars of the home's market value. It doesn't. It means $1.55 per hundred dollars of the assessed value, which is a quarter of the appraised value for a residential home. The mental shortcut: divide your home's appraisal by four, then apply the rate.

That single difference is why Tennessee, despite a tax rate that looks unremarkable on paper, has one of the gentler effective property tax burdens in the country. The headline number lies a little. The math is your friend.

The math, on a real Farragut house

Let me work it through with a number close to what a relocating family actually shops for in Farragut in 2026. Take a four-bedroom traditional in one of the school-anchored pockets — the kind of house that runs around $600,000 these days.

The math in plain English: the Knox County Property Assessor sets your appraised value at $600,000. The state constitution assesses that at 25 percent, so your assessed value is $150,000. The Knox County tax rate for 2025–2026 is $1.5540 per $100 of assessed value. Multiply that out — $150,000 × ($1.5540 / $100) — and you land at $2,331 for the year. Divide by twelve and you'll see about $194 a month land in your mortgage escrow.

A few hundred yards inside the City of Knoxville limits, on the same $600,000 home, the bill would be roughly $5,564 a year — about $464 a month in escrow. The Town of Farragut difference is real, and it's a line item your lender will quote you in the closing disclosure.

The 2026 reappraisal — and why your bill isn't doubling

Knox County is on a four-year reappraisal cycle, and 2026 is a reappraisal year. The county's assessor has publicly estimated that residential appraisals will rise by roughly 50 percent across the county — Knoxville real estate has had a remarkable run since the last reappraisal in 2022. Naturally, the first reaction from anyone who's owned a home elsewhere is to brace for a property tax bill that doubles.

It won't.

Tennessee has a state law called the certified tax rate — sometimes called "truth in taxation" — that requires the county to adjust the tax rate down after each reappraisal so total property tax revenue (excluding new construction) stays approximately neutral. If appraisals rise 50 percent, the rate has to drop enough to offset most of that. Recent estimates from the county put the post-reappraisal rate somewhere around $0.78 per $100 of assessed value — roughly half of where it sits today. The county commission still has to set the actual 2026 rate over the summer, and they have the legal option to vote it higher (with public hearings), but the default is revenue-neutral.

A few things worth knowing as a newcomer:

1. Your bill may move modestly, not dramatically. A revenue-neutral rate doesn't mean your bill is exactly the same — it means total county revenue is. Homes that appreciated faster than the average will see a small increase. Homes that appreciated slower will see a small decrease.
2. The cycle is changing. Starting with 2026, Knox County moves from a four-year reappraisal cycle to a two-year cycle. You'll see your appraised value updated more often, but the certified tax rate law applies each time. The math reins itself in.
3. You can appeal. If your reappraisal feels out of step with the actual market value of your home, you have a formal right to appeal it. The window is short — usually about thirty days from the notice. Your agent (hi) is a good first phone call if you think the number is off.

The reappraisal is the most-misunderstood part of the Tennessee property tax system, and it's the part that catches transplants by surprise more than anything else. The headlines look scary. The structure of the law is on your side.

The honest tradeoff: property tax and no state income tax

Now for the part nobody wants to oversell, and I won't.

Tennessee has no state income tax. None on W-2 wages, none on most retirement income, none on capital gains. For a household earning $200,000 in California or New York, that's roughly $13,000 to $20,000 a year that simply doesn't exist as a line item anymore. If you're coming from Illinois or New Jersey it's a similar story. If you're coming from Florida or Texas, you're already used to it.

Property tax is the place states without an income tax usually make their money back. Tennessee makes some of it back, but not all of it, and not nearly as aggressively as Texas. The all-in tax bill for most middle-class and upper-middle-class households moving from a high-income-tax state to Knoxville is meaningfully lower — not slightly, meaningfully — even after you've added the property tax line back in. I've watched this play out in client after client.

Where the math gets closer, honestly:

• Coming from Florida, where Save Our Homes caps the annual increase on your homesteaded property's assessed value at 3 percent, your Florida bill on a long-held home may be lower than your new Farragut bill on a home you just bought. That's a real consideration if you're retiring out of Florida.
• Coming from a no-income-tax state already (Washington, Texas, Florida, New Hampshire, Wyoming, Nevada, South Dakota, Alaska), the property-tax-only comparison is the only one that matters, and Tennessee usually still wins — but the gap is narrower.
• Coming from a high-income-tax state (California, New York, Illinois, New Jersey, Massachusetts, Oregon), the math is almost always firmly in Tennessee's favor once you add it all up.

I'd rather you arrive with realistic numbers than overpromised ones, so I tend to send relocating clients to a CPA who has seen both ends of the move. It's a one-hour phone call that pays for itself.

Tax relief programs most newcomers don't know about

Tennessee runs two state-funded property tax relief programs administered by the County Trustee. Neither is well-publicized, and both are worth knowing about if you or someone in your household qualifies.

Elderly and disabled homeowners. If you're 65 or older, or totally and permanently disabled, and your household income is at or below $37,530 (the 2026 limit, adjusted annually), the state pays a portion of the property tax on the first $30,000 of your home's market value. The relief is administered through the Knox County Trustee's office.

Disabled veterans. If you're a veteran with a 100 percent service-connected disability, or the surviving spouse of one, you qualify for relief on the first $175,000 of your home's market value. There is no income limit on this program. This is a meaningful number for any veteran moving to Knoxville — apply through the Trustee's office in your first year.

Both programs are real, both are funded by the state legislature each year, and both are dramatically underused. If you suspect you qualify, the Knox County Trustee is the right phone call to make in your first month after closing.

A budgeting checklist before you close

This is the short list I walk relocating buyers through in the week before closing. None of it is dramatic. All of it is the kind of detail that saves a stressful Tuesday in November.

The line I want every Farragut newcomer to land on is informed, not scared. Once you understand the structure, the property tax bill becomes one of the cleaner numbers in your monthly budget — and one of the better arguments for picking Farragut over a stacked-tax address a few miles east.

If you're still in the early innings of a Knoxville relocation, the companion piece to this one is my moving to Farragut guide — what a three-week Zillow shortlist gets wrong about the four distinct pockets inside the town. For buyers running the broader Knoxville math, the four numbers I walk first-time buyers through covers the kitchen-table side of the conversation.