RUTHERFORD COUNTY, TENN. - Rutherford County Mayor Joe Carr is proposing an increase to the property tax that adds up to more than 15%. The proposal is gaining momentum after the idea of an impact fee for Rutherford County failed in the Tennessee General Assembly... If the county impact fee would have been permitted, then the county would have been allowed to charge up to $5,000 on the construction of any new residential property being built. 

Meanwhile, the immediate past president of the Middle Tennessee Association of Realtor's says the county previously added a tax to help fund growth... That was Realtor Christopher Wilson. Currently, the tax charged on new residential development throughout the county is called the Schools Facilities Tax. The rate sits at $1.00 per square foot and is charged on all newly built residential space. Residential space includes single family homes, multi-family developments, assisted living facilities and any hotel developments that have long-term rooms that include a kitchen. The fee is a one-time tax that is charged on new residential construction. 

The Schools Facilities Tax replaced the county Development Tax in July of 2021. Wilson explained the change occurred under former Mayor Bill Ketron... Rutherford County was allowed to implement the current per-square-foot fee on new residential development because of the “County Powers Relief Act” that was passed by lawmakers in 2006.

Despite the per-square-foot charge on new residential development under the Schools Facilities Tax, the county mayor suggests that more funds are needed to pay for the continued growth. To help pay for that growth, the idea of a property tax increase that adds up to more than 15% has already received the nod from the Budget, Finance and Investment Committee. A public hearing to further discuss a property tax increase will be held on Tuesday, June 13th at 7PM in the county courthouse.

The full county commission will vote for or against the property tax increase on June 26, 2023.

Looking Back - Some properties may still be under the older Development Tax, which was 'grandfathered in' for plats of land that were recorded prior to the adoption of the Schools Facilities Tax. In other words, if a builder were to erect an apartment complex on a tract of land that was recorded with the county prior to July 1, 2021, then the builder would have to pay the Development Tax on the structure. If the tract of land to be developed was sold and recorded after July 1, 2021, then the builder has to pay the Schools Facilities Tax.

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