Shelby County Property Taxes: What Memphis Rental Investors Pay in 2026

The combined Shelby County and City of Memphis property tax rate for 2025 is $5.27081 per $100 of assessed value. On a $150,000 single-family rental, that is $1,977 per year. On a $200,000 property, it is $2,635.

Those numbers matter because property taxes are one of the largest fixed expenses on a Memphis rental, they do not fluctuate with occupancy, and they run significantly higher than the competing Tennessee markets attracting the same investor capital. If your cash flow model does not have the actual figures, it is wrong.

How the tax bill is calculated

Tennessee assesses residential property at 25% of its appraised value. That is set by state law, not local option. The first number you need is not the tax rate. It is the assessed value.

The math for a $175,000 property: appraised value is $175,000. Assessed value is $175,000 × 25% = $43,750. Annual tax at $5.27081 per $100 is $43,750 ÷ 100 × $5.27081 = $2,306.

The county portion ($2.69 per $100) and city portion ($2.58081 per $100) are billed separately but both have a due date of August 31. The Shelby County Trustee collects both. You can pay them on the same platform.

One clarification for investors holding properties through an LLC: the 25% residential assessment rate applies when the actual use is residential. Commercial and mixed-use properties assess at 40% of market value. A single-family home held in an LLC and rented to one family qualifies for the residential rate as long as the use classification remains residential.

The 2025 reappraisal: why rates dropped but bills often went up

Shelby County completed its 4-year reappraisal cycle in 2025. Property values across the county increased substantially. Under Tennessee law, when a reappraisal increases the overall tax base, the county must certify a revenue-neutral rate that generates the same total tax revenue as the prior year at the new valuations.

The Shelby County rate dropped from $3.39 to $2.69. That reduction reflects the higher assessed values, not a reduction in total taxes collected. For individual investors, the effect depends on how your specific property appreciated relative to the county average.

If your property's assessed value rose at the county average rate, your bill is roughly flat. If it appreciated faster than average, your bill went up despite the lower rate. The next reappraisal is scheduled for 2029. Between now and then, your assessed value holds at the 2025 figure unless you successfully appeal it.

Memphis property taxes vs. the rest of Tennessee

Property taxes are one of the primary reasons Memphis gross yields look stronger than Nashville on paper but underperform when net cash flow is the comparison.

Memphis investors pay nearly twice the annual tax of a Nashville investor on a same-priced property, and three times the tax of a Franklin investor. The gross yield advantage Memphis carries over Nashville (typically 2 to 3 percentage points) narrows materially once property taxes are accounted for in the full expense stack.

On a Memphis rental earning $1,200 per month, property taxes are $165 per month, or 13.75% of gross rent. That is before management fees, maintenance reserves, insurance, or vacancy. The numbers say Memphis works for investors who understand the full cost structure, not investors running incomplete models.

How to appeal your assessment

Shelby County property owners can appeal assessed values through the Board of Equalization. The annual appeal window runs May 1 through June 30. In reappraisal years, the deadline extends to July 31. The 2025 reappraisal made July 31, 2025 the deadline for that cycle.

An effective appeal requires evidence that your property's market value is lower than the county's appraised figure. Comparable sales from the prior 12 months in your immediate area are the primary tool. A licensed appraisal strengthens the case but is not required. The process starts with an informal hearing through the Assessor's office. If that hearing does not result in a reduction, you escalate to the formal Board of Equalization hearing. After that, the Tennessee Assessment Appeals Commission and, ultimately, chancery court are the remaining options.

Appeals work best when a reappraisal pushed your specific property significantly above demonstrable market value. They are harder to win when the county can show recent comparable sales at or above the appraised figure. Given that 2025 was a reappraisal year and Memphis values were up across most neighborhoods, well-documented comps that show a lower value are the deciding factor in most cases.

What property taxes do to your return model

The standard Memphis investor model for a $150,000 property renting at $1,100 per month shows $165 in monthly property taxes. That is a fixed cost that does not change when the unit is vacant. It does not change when rent is late. It applies whether the property earns $0 in a month or $1,200. It is the second-largest non-management fixed expense on most single-family Memphis rentals after insurance.

Investors who model Memphis cap rates at gross rent minus only mortgage payment are leaving $2,000 per year of expense unaccounted for before any other cost. For the correct cap rate formula with a full Memphis expense stack, the Memphis cap rate guide walks through each line item and what realistic net operating income actually looks like.

For a full cash flow model on a $150,000 Memphis rental with maintenance reserves, vacancy, management, insurance, and taxes all included, the rental property cash flow analysis shows what that property actually returns versus what the napkin math says.

Out-of-state investors also need to account for Tennessee franchise and excise tax at the LLC level, which applies to entities owning Tennessee property. For the full picture on entity structure requirements, Tennessee registration rules, and how to model total tax exposure as a remote owner, the out-of-state landlord Memphis guide covers what the law and the numbers require.