Tennessee SBOE Reclassifies Rental Condos as Residential Property

The Tennessee State Board of Equalization ruled that 12 condominium units owned by an individual taxpayer in Rutherford County should be classified as residential property rather than commercial property for tax years 2023 and 2024. The appeal arose after the Rutherford County Assessor’s Office reclassified the units as commercial property following a state audit finding. The taxpayer argued that the condominiums were acquired over time as retirement-income investments and were subject to homeowners association restrictions limiting their use to residential purposes. In evaluating the classification, the Administrative Judge considered factors developed in prior Tennessee case law, including the ownership structure, ...