General information, not legal or tax advice

Downsizing in Manchester, TN

Many Manchester homeowners reach a point where the house no longer fits the way they live. Maybe there are rooms you rarely open, a yard that takes every Saturday, or stairs you would rather not climb. Moving to a smaller or simpler home can free up time and money, but it is also a big project. This guide walks through the steps, the tax rules and the Coffee County property tax programs worth knowing about, so you can plan a move that fits your needs.

This is general information, not legal or tax advice. Program rules and income limits change every year. Please confirm details with the Coffee County Trustee, the City of Manchester, the IRS and a tax professional before you rely on them.

Step 1: Decide what you want in your next home

Start with how you want to live, not with a list of houses. Questions I suggest writing down:

• How many bedrooms and bathrooms do you really use?
• Would you like everything on one level, with no stairs to the bedroom, laundry or main bath?
• How much yard do you want to keep up, if any?
• Would a condo or townhome with shared exterior upkeep suit you, or do you want a detached home?
• What do you want close by, such as family, your doctor, your church, shopping or the interstate?
• How much storage and garage space do you need for what you plan to keep?

When I help someone look for their next home, the search is built around those answers and your budget.

Step 2: Find out what your current home is worth

Your sale price shapes everything else: your budget for the next home, whether you need a mortgage, and what you keep after closing. A home value report based on recent local sales gives you a realistic range to plan with. It is an opinion of market value to help you plan, not an appraisal. Request yours on my home value page, or read what is my Manchester home worth.

Then look at your likely costs to sell. My guide to seller closing costs in Tennessee explains the usual items, such as your mortgage payoff, property tax proration, closing agent fees and commission, which is negotiable.

Step 3: Plan the timing of the sale and the purchase

The hardest part of downsizing is often the order of things. There are three common paths, and each has tradeoffs:

• Sell first, then buy. You know exactly what you have to spend, and you are not carrying two homes. The tradeoff is that you may need a short term place to stay, or a closing date that gives you time to move.
• Buy first, then sell. You move once, on your own schedule. The tradeoff is that you may carry two homes for a while, and your lender will look at whether you can qualify while you still own the first one.
• Line them up together. You can ask for a closing date on your sale that matches the purchase, or ask the buyer to let you stay for a short time after closing under a written agreement. An offer on your next home can also be made contingent on selling your current home, though sellers may weigh that against offers with no such condition.

Talk with a lender early about which path you can qualify for. I will help you write the timing into the contracts so the dates work together. If you have questions about your rights in the contract, ask a Tennessee real estate attorney.

Step 4: Sort, give away and sell belongings

Most people moving to a smaller home have more things than space. Give yourself more time than you think you need.

• Start with rooms you use least, such as the attic, basement, garage and spare bedrooms.
• Measure the rooms in your next home, or use its floor plan, and decide which furniture will fit before moving day.
• Sort into keep, give to family, donate, sell and discard. Ask family members to pick up the items they want by a set date.
• For a full house of furniture and household goods, some owners hire an estate sale company. Ask how they price items, what they charge, how they handle anything that does not sell, and get the agreement in writing.
• Keep important papers together and in a safe place: the deed, mortgage statements, tax bills, insurance policies, receipts for improvements and warranties.

Clearing clutter before you list also helps the home show well. My prepare to sell checklist covers cleaning, repairs and presentation room by room. If you would rather not take on repairs, read about selling a house as is.

Step 5: Understand the IRS home sale exclusion

IRS Publication 523 says that if you meet certain conditions, you may exclude the first $250,000 of gain from the sale of your home from your income, or up to $500,000 for a married couple filing jointly. Key points from the publication:

• Ownership. You owned the home for at least 24 months (2 years) out of the last 5 years before the date of sale. For a married couple filing jointly, only one spouse has to meet the ownership requirement.
• Residence. You used the home as your residence for at least 24 months of the previous 5 years. The months do not have to be in a single block.
• Look back. You generally may take the exclusion only once during a 2 year period.
• Main home only. The exclusion applies only to the sale of your main home. An individual has only one main home at a time.
• Care facility time. If you become physically or mentally unable to care for yourself and you used the home as your main home for at least 12 months in the 5 years before the sale, time spent in a licensed care facility can count toward the residence requirement.
• Surviving spouses. A surviving spouse who has not remarried may be able to count the late spouse's ownership and residence time, and may be able to use the $500,000 exclusion if the home is sold within 2 years of the spouse's death and the other conditions are met.
• Records. The IRS says to keep records that document your home's basis, such as purchase papers and receipts for improvements, generally until 3 years after the due date of your tax return for the year you sell.

Your gain is figured from your selling price, selling expenses and adjusted basis, so improvement receipts matter. A tax professional can tell you whether any of your gain is taxable and what you need to report.

Step 6: Know the property tax programs in Coffee County

Two state programs can lower or hold steady the property taxes on a home you own and live in. Both are applied for through the tax collecting office, and both require a new application every year. My Coffee County property taxes guide explains how city and county taxes work in general.

Property Tax Relief

The Tennessee Comptroller's Property Tax Relief program is a reimbursement by the State of Tennessee for part or all of the property taxes paid by eligible homeowners. It is not an exemption, so you still receive and pay your tax bill. For tax year 2026, the Comptroller lists these groups:

• Elderly homeowners who are 65 or older on or before December 31, 2026, own the home and use it as their primary residence, with maximum 2025 income of $38,470 for the applicant, spouse, co owner and resident remainder combined.
• Disabled homeowners who are disabled on or before December 31, 2026, with the same ownership and income rules.
• Disabled veteran homeowners and qualifying surviving spouses, with eligibility based on information from the VA. The City of Manchester notes there is no income or age requirement for qualified disabled veterans and qualified surviving spouses.

For elderly and disabled homeowners, the Comptroller's 2026 brochure says relief is calculated on a maximum market value of $33,600. Relief is available only on your primary residence.

Property Tax Freeze

The Property Tax Freeze is a local option program. According to the Comptroller's list of participating jurisdictions, Coffee County adopted it in 2008, the City of Manchester in 2007 and the City of Tullahoma in 2009, and the 2026 income limit for each is $46,730. A qualifying homeowner's taxes on their principal residence are frozen at a base amount, the taxes owed in the year they first qualify, and generally do not change even if the tax rate rises or the county reappraises. To qualify, the Comptroller says the homeowner must:

• Own their principal residence in a participating county or city
• Be 65 or older by the end of the year they apply
• Have income from all sources at or below the income limit for that year
• File an application every year

What a move means for these programs

This is the part downsizers most often miss:

• A freeze does not move with you. The Comptroller says freeze benefits do not travel with the owner and must be established for each property, and the base tax amount changes when the homeowner sells their home and buys another residence. Improvements that raise the value also adjust the frozen amount.
• Ownership through the deadline. For the freeze, the Comptroller says you must own the property for some part of the tax year and keep ownership through the application deadline, which is 35 days after the delinquency date. Coffee County says its county taxes become delinquent on March 1.
• Relief is for one home. Tax relief applies only to your primary residence in any given tax year.
• Approval for one can help with the other. The Comptroller says approval for tax relief as a low income elderly applicant serves as evidence of age and income for the freeze, but a separate freeze application is still required.

If you are selling or buying near tax season, call the Trustee before you set closing dates and ask how the timing affects your application.

Where to apply in Coffee County

• Coffee County Trustee. 1341 McArthur Street, Suite A, Manchester, TN 37355. Phone (931) 723 5128. Office hours are 8:00 a.m. to 4:30 p.m., Monday through Friday. The county says the Trustee's office helps qualifying elderly, disabled, disabled veteran and surviving spouse taxpayers apply for the state Tax Relief Program.
• City of Manchester. If your home is inside Manchester city limits, you also pay city taxes. The city says tax relief applications and in person tax freeze applications are turned in at the Tax Collections Office inside City Hall, 200 W. Fort Street, Manchester, TN 37355. Phone (931) 728 4652.
• State Tax Relief office. The Comptroller's Tax Relief section can be reached at (615) 747 8871, or toll free at (800) 221 9927.

The Comptroller's brochure says you may apply when you receive your property tax bill, and the deadline is 35 days after the delinquency date. Taxes must also be paid by that date. Coffee County says its tax notices are mailed in October.

A simple downsizing timeline

• First: Write down what you want in your next home, get a home value report, and talk with a lender and a tax professional.
• Next: Start sorting belongings, beginning with the rooms you use least. Choose whether to sell first, buy first or line the two up.
• Before listing: Finish clearing and repairs, gather your home records and complete your seller disclosure.
• Under contract: Coordinate the closing dates, schedule movers, and set up utilities at the new home.
• After the move: If you still receive Coffee County tax notices, update your mailing address with the Property Assessor's office at (931) 723 5126, which the county says handles address changes. Ask about tax relief or the tax freeze on your new home if you qualify.

How I help

I help homeowners across Manchester and Coffee County sell one home and buy the next. I will prepare your home value report, help you decide what to fix and what to leave, line up the timing of both closings, and search for homes that match the list you made in Step 1. Tax questions go to your tax professional, and legal questions go to your attorney.

Keep reading:

• Seller closing costs in Tennessee
• How property taxes work in Coffee County
• How to sell a house in Manchester
• Prepare to sell checklist
• Selling an inherited home in Tennessee
• Free home value report
• All Manchester guides

Thinking about downsizing in Manchester?

I am glad to talk it through, with no pressure and no obligation. Call or text me at (615) 497 1658, or request your free home value report below.

Common questions

Matt Sargent is a Tennessee licensed affiliate broker with Keller Williams who helps buyers and sellers in Manchester and Coffee County. Call (615) 497 1658 or send a message.