City Vs. County Taxes: What Relocators Should Know

Thinking about moving to Lookout Valley in Chattanooga and trying to make sense of city versus county taxes? You are not alone. Understanding how taxes change when you cross a city limit can help you budget with confidence and avoid surprises at closing. In this quick guide, you will learn what taxes to expect, how to estimate a property tax bill, and what changes if your home is inside Chattanooga city limits. Let’s dive in.

City vs. county taxes at a glance

Tennessee does not tax wages, and its former tax on interest and dividends was fully repealed in 2021. That means your day-to-day tax picture is mostly property taxes, sales tax, and one-time fees at closing. You can read more about the state’s income tax policy on the Tennessee Department of Revenue site explaining the Hall tax repeal.

In Hamilton County, you will always pay the county property tax. If your home is inside the City of Chattanooga, you will also pay the city’s property tax. Lookout Valley, also known as Tiftonia, is shown within Chattanooga city limits in the city’s neighborhood materials, so most homes there pay both.

Property taxes: how they work here

Tennessee calculates property tax on the assessed value, not full market value. For residential property, assessed value is 25 percent of appraised market value. The formula is simple: assessed value divided by 100, then multiplied by the tax rate (rates are stated per $100 of assessed value).

Local leaders set rates each year. After the 2025 reappraisal, reporting showed a Hamilton County certified rate around $1.5157 per $100 and a City of Chattanooga certified rate around $1.55 per $100. Final adopted rates can change during budget season, so always confirm current-year numbers. See recent coverage of certified rates for context.

Inside city limits vs. unincorporated

If your Lookout Valley home is inside Chattanooga, you will pay the county rate plus the city rate. If a property is in unincorporated Hamilton County, you will pay only the county rate. City boundaries also determine which local services you receive.

Estimate your annual bill

Here is a simple illustration. Suppose a home is appraised at $300,000. The assessed value is 25 percent, or $75,000. If the county rate were $1.5157 and the city rate were $1.55 per $100, the combined rate would be about $3.0657. Estimated tax would be $75,000 divided by 100 times $3.0657, or roughly $2,299 per year. Outside city limits, using only the county rate, the estimate would be about $1,137. These are examples only. Confirm the current adopted rates before you rely on an estimate.

Relief programs and appeals

Property tax relief programs exist for qualifying seniors, disabled homeowners, and certain disabled veterans. Start early and review the Hamilton County Trustee’s frequently asked questions for deadlines and documents. If you believe your value is incorrect, the assessor offers an informal review and a formal appeal to the County Board of Equalization. Learn about timing and steps in the Assessor’s appeal FAQs.

Sales tax: what you will pay

Tennessee’s state sales tax is 7 percent. Hamilton County adds 2.25 percent in most areas, for a typical combined rate around 9.25 percent. Some ZIPs or special districts can vary, so check the exact address. See an overview of Hamilton County’s combined rate on Avalara’s rate page.

You can also time certain purchases around state-run sales tax holidays, like back-to-school events. Dates and eligible items change, and updates are posted by reliable outlets such as Kiplinger’s Tennessee sales tax holiday guide.

Closing taxes and fees when you buy

Expect a one-time state recordation tax when your deed is recorded. Tennessee imposes $0.37 per $100 of consideration, usually collected at the register of deeds when the deed is filed. See the statute for details in Tenn. Code § 67-4-409. County recording fees also apply. These are separate from your annual property tax bill.

Vehicles and registration

If you bring or buy a vehicle in Tennessee, you generally pay state sales or use tax, plus the local component, when you title and register the vehicle. Dealers usually collect this at purchase, and private sales are paid at the county clerk. The Tennessee Department of Revenue’s Sales and Use Tax Manual explains the rules and exceptions in detail, including out-of-state purchases and nonresident removals. Review the state guidance in the Sales and Use Tax Manual.

Why city limits matter for services

Your property tax dollars fund local services like public safety, roads, parks, and libraries. Living inside Chattanooga city limits connects you to city services and the city tax rate, while unincorporated addresses receive county services and pay only the county rate. Two similar homes can have different bills based on city boundaries and any special districts.

Quick checklist for relocators

• Confirm if the property is inside Chattanooga city limits. Use city neighborhood resources or ask your agent to verify with the county GIS. The city lists Lookout Valley/Tiftonia among its neighborhoods on this page.
• Ask for the most recent property tax bill and parcel ID. Compare it with your estimate using the current year’s adopted county and city rates. Recent certified-rate context is available here.
• Budget for the state deed recordation tax and county recording fees at closing. The deed tax rate is set in Tenn. Code § 67-4-409.
• After you move, register your vehicle and plan for sales or use tax and title fees. See the Sales and Use Tax Manual for state guidance.
• If you may qualify for senior, disability, or veteran property tax relief, apply early with the county trustee. Start with the Trustee’s FAQ page.

Ready for a smooth Chattanooga move? With appraisal-backed pricing insight and concierge-level service, you can navigate taxes, timelines, and closing with clarity. If you are weighing a move to Lookout Valley or elsewhere in Tennessee, reach out to Jennifer Whicker for one-to-one guidance.

FAQs

Do I pay Tennessee state income tax on my wages if I move to Chattanooga?

• No. Tennessee does not tax wages. The state’s tax on interest and dividends was fully repealed starting in 2021.

What is the sales tax rate in Hamilton County and Chattanooga?

• The typical combined rate is about 9.25 percent, which is 7.0 percent state plus 2.25 percent local. Some areas can vary, so verify by address.

How do I estimate my Chattanooga property tax bill?

• Multiply your appraised value by 25 percent to get assessed value, divide by 100, then multiply by the current county rate, plus the city rate if you are inside Chattanooga.

Is there a transfer tax when I buy a home in Tennessee?

• Yes. Tennessee charges a state recordation tax of $0.37 per $100 of the property’s value, collected when the deed is recorded, plus county recording fees.

Are Lookout Valley and Tiftonia inside Chattanooga city limits for taxes?

• Most addresses commonly referred to as Lookout Valley or Tiftonia are within Chattanooga city limits, which means both county and city property tax rates apply.