Picture two listings at the same price. One is in Farragut and one is inside Knoxville city limits in Bearden or Sequoyah Hills. Why does the Farragut tax estimate come out so much lower? The Town of Farragut doesn't send its homeowners a property tax bill. According to its own annual financial report, the town "does not provide a full range of municipal services, nor does it levy any property taxes." It still maintains streets and drainage, runs parks and recreation, and handles planning, zoning, codes enforcement, and engineering. The money for that work comes mostly from people buying things at Farragut stores.
This post explains how that works, what it means for a tax line in 2026, and why shoppers matter more to the town's finances than homeowners do.
One Rate on the Bill, Not Two
The county and city rates on this fall's bills are both new, because of the 2026 Knox County reappraisal. Countywide values rose about 60% since the last appraisal, so the county and the City of Knoxville both lowered their rates to certified levels that bring in roughly the same total revenue.
Knox County Commission approved Resolution R-26-8-911 by an 11-0 vote on August 31, 2026, as recorded in the Commission minutes. The resolution sets the county rate for July 1, 2026, through June 30, 2027, at $1.0158 per $100 of assessed value. On September 15, 2026, Knoxville City Council passed emergency Ordinance O-74-2026 by a 7-0 vote, cutting the city rate from $2.1556 to $1.3956, according to the council minutes.
Here's how that plays out for buyers comparing addresses across West Knoxville:
| Address | Tax year 2026 rate per $100 assessed | Who pays for local services |
|---|---|---|
| Town of Farragut | $1.0158, county only | Town sales tax, state-shared revenue, fees |
| Hardin Valley, outside city limits | $1.0158, county only | Knox County |
| City of Knoxville, including Bearden and Sequoyah Hills | $1.0158 county plus $1.3956 city | City property tax plus county |
Farragut and Hardin Valley carry the same rate. In Hardin Valley, decisions like the Ball Homes rezoning on Buttermilk Road go to Knox County Commission. In Farragut, a town Board of Mayor and Aldermen decides zoning and capital projects, and the property tax bill doesn't pay for any of it.
Running One Appraisal Through the Formula
The Tennessee Comptroller explains that residential property is assessed at 25% of appraised value, and the tax rate applies to that assessed figure. Here's an illustration using a round $500,000 appraisal. It shows the formula, not any real home's bill:
- Assessed value is $500,000 × 25%, or $125,000.
- The county share at $1.0158 per $100 comes to $1,269.75. For a Farragut address, that's the whole bill.
- A Knoxville city address adds $1.3956 per $100, which is $1,744.50.
- Together, the city address owes $3,014.25 on the same appraisal.
That illustrative gap of about $1,745 a year is the cost a Farragut homeowner doesn't carry directly. Someone still pays for those services, though. The town covers them with a different tax.
Reappraisal adds a second issue for buyers. The listing's prior-year bill reflects neither the new appraisal nor the new rate. Chief Deputy Assessor Jim Weaver told WVLT the reset is designed to keep total collections steady. Homes whose value rose more than about 60% will pay a bit more, and homes that rose less may pay less, or "a lot less." The Knox County Property Assessor makes the same point: a reappraisal doesn't automatically raise a bill. The amount depends on the new assessment and the rate. A 2025 tax figure on a Farragut listing tells you about the old appraisal and nothing more.
For city addresses, WVLT reported a 1% discount for paying in full by the end of October, with a deadline of the last day of February. That discount applies only inside Knoxville city limits.
Shoppers Pay for the Roads
Look at the town's books and you can see who pays. In fiscal 2025, Farragut collected $10,899,674 in local-option sales tax out of $19,260,598 in total General Fund revenue. That's about 56.6%. A year earlier the share was about 55.3%, or $10,406,132 of $18,808,315. The FY2025 report credits the growth to higher collections from merchants and wholesalers.
Most of that money comes from retail. In the FY2024 report, retail trade produced 84.64% of Farragut's reported local sales tax liability. Back in January 2020, Farragut Press estimated that roughly a third of town sales tax came from Turkey Creek and Parkside. That figure is now several years old, but it shows how much a single shopping district can contribute.
Anyone who shops in Farragut contributes to that revenue, wherever they live. So the roughly $1,745 a city homeowner pays in the example above, a Farragut homeowner covers only through their own purchases inside town limits, which shoppers from other areas help pay for too.
Farragut's Budget Assumes Slow Growth
The upside is a debt-free town. Farragut hasn't carried debt since 2001, and its FY2026 budget was balanced with revenue above spending. The town is also open about the risk. Its financial report puts it plainly:
"The Town of Farragut is particularly susceptible to economic fluctuations due to its reliance on local sales tax."
So the town budgets cautiously. For FY2026, it assumed sales tax collections would stay flat based on the prior twelve months. For 2027 through 2036, it assumes 2% annual growth. In May 2026, Town Administrator David Smoak projected FY2027 local sales tax at $11,032,897. That's a 2.5% increase and 57.3% of $19,225,404 in General Fund revenue, as reported by Farragut Press. State sales tax, which is shared out based on Farragut's estimated population of 25,242, was projected at $3.3 million.
Homeowners see that revenue in their surroundings. The Board unanimously approved the FY2026-27 budget on May 28 with an $8,778,000 capital plan. It includes a traffic signal at North Campbell Station Road and Jamestowne Boulevard, multimodal improvements on Turkey Creek Road, a roundabout on Watt Road at the southern entrance to Mayor Bob Leonard Park, street and crosswalk work for the new Farragut Elementary School, and design work on McFee Road. Those projects are paid for by shoppers, not by property tax bills.
The 2026 Election Turned on Sales Tax
Since retail revenue pays for the town, it also shapes local politics. In the Knox News voter's guide for the August 6 election, Ward 1 candidate Dian Hall pledged to oppose a town property tax, and Joey Ruffalo named keeping the rate at zero as a priority. At a July candidate forum, mayoral candidate Louise Povlin said a property tax should only come through a referendum and that she opposed ever adopting one.
Alderman Alex Cain won the mayor's race by 65 votes, 3,099 to 3,034, based on unofficial results reported by Farragut Press. Ruffalo won North Ward 1 and Greg Wiberley won South Ward 2. Certification was tentatively scheduled for August 20, with swearing-in on August 27.
None of the candidates proposed a property tax. The debate was about how to keep the sales tax base growing. Earlier in the spring, then-Mayor Ron Williams told Farragut Press that business recruitment matters because the town is sales-tax-based and needs a steady flow of that revenue. The new budget adds an economic development position at $115,936 a year to give businesses one point of contact with town departments. It also adds $15,000 for the Farragut Business Alliance/Shop Farragut. That volunteer group puts on Harvest Fest and Dog Daze and runs the Town Sampler contest.
For a buyer, a Farragut address keeps its zero town tax line only as long as people keep shopping in town. Every candidate in 2026 ran on keeping it that way.
Frequently Asked Questions
Does Farragut have a property tax in 2026?
Not at the town level. Farragut homeowners pay the Knox County rate of $1.0158 per $100 of assessed value for tax year 2026, and the town adds nothing.
Did the lower 2026 rates cut tax bills?
The rates were set to bring in about the same total revenue after values rose about 60%. Each home's bill depends on how its own appraisal changed compared with that countywide figure.
Could Farragut adopt a property tax?
The town hasn't proposed one. Candidates in 2026 pledged to keep the rate at zero, and one mayoral candidate said any property tax should require a referendum.
If you're comparing a Farragut address with a Knoxville city address and want to know what the 2026 tax line on a specific home will actually be, Karli Pritchard Realtors can run the reappraised numbers with you before you write an offer. Schedule a personalized market consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
