TN · #15 by population

Buying a home in Tennessee

Costs and rules that are specific to Tennessee. Main city: Nashville.

In short

Tennessee taxes property sales through its realty transfer tax, does not require an attorney at closing and requires a seller disclosure form. It allows both court and out-of-court foreclosure and lets couples opt in to community property.

Calculate for Tennessee

If you buy

Tennessee state transfer tax

Realty transfer tax (recordation tax, Tenn. Code Ann. 67-4-409): $0.37 per $100 of purchase price (0.37%). Change the price: the amount is recalculated instantly.

Price$332,600
State transfer tax$1,230.62
Share of the price0.37% of the price
Who paysThe buyer

Default price: the Tennessee median value of owner-occupied homes, $332,600 (Census ACS 2024). Rule: Price divided by $100, times $0.37. The base for a typical sale is the greater of the price paid or the value of the property at transfer. The sources do not say how a fraction of $100 is handled. Who pays: The Department's manual says the grantee (buyer named on the deed) pays the realty transfer tax and the mortgagor pays the mortgage tax; the manual does not discuss private agreements, so check the purchase contract. Not included: county and city transfer taxes, the tax on the mortgage, recording fees, title insurance and lender charges. Tennessee transfer tax guide · all 50 states.

If you sell

Capital gain and the federal tax on it

Same federal rule in every state: Section 121 of the Internal Revenue Code excludes up to $250,000 of gain on a main home ($500,000 for a married couple filing jointly).

Capital gain$350,000
Section 121 exclusion$250,000 (limit $250,000)
Taxable gain$100,000
Type of gainLong-term (owned over 1 year), 15% chosen
Federal tax on the gain$15,000

Section 121 excludes $250,000; the rest is taxable.

Gain = sale price minus your adjusted basis (purchase price, buying costs and improvements); selling expenses reduce it (IRS Publication 523). Long-term rates for sales in 2026, by taxable income including the gain (IRS Rev. Proc. 2025-32, section 4.03): 0% up to $49,450 single or $98,900 married filing jointly, 15% up to $545,500 single or $613,700 jointly, 20% above. Not included: Tennessee state income tax on the gain (not computed), the net investment income tax, depreciation recapture on a rental or home office, and the reduced exclusion for an early sale. Agent commissions are negotiated and never set by law. Capital gains on a home sale.

Tennessee in short

Is there a real estate transfer tax in Tennessee?

Tennessee taxes both the deed and the loan: the realty transfer tax is $0.37 per $100 of purchase price and the mortgage tax is $0.115 per $100 of debt with the first $2,000 exempt. By the Department of Revenue's rules the buyer pays the first and the borrower the second.

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How much is the state transfer tax on a $332,600 home in Tennessee?

On $332,600, the median value of owner-occupied homes in Tennessee (Census ACS 2024), the state realty transfer tax comes to $1,230.62 ($0.37 per $100 of purchase price (0.37%)). County and city taxes are not included.

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What closing costs does Tennessee law set?

Tennessee has no official typical closing-cost total. The buyer owes a realty transfer tax of $0.37 per $100 of price and the borrower a mortgage tax of $0.115 per $100 after the first $2,000, which is $1,480 and $365.70 on a $400,000 home with a $320,000 loan.

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How is property tax calculated in Tennessee?

Tennessee assesses homes at 25% of appraised value. In Nashville-Davidson County the 2025 rate is $2.814 per $100 of assessed value in the Urban Services District and $2.782 in the General Services District, or $2,814 a year on a $400,000 home in the USD.

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What is the deadline to appeal a property tax assessment in Tennessee?

In Nashville-Davidson County, Tennessee, the 2026 deadline for informal review with the Assessor was April 17 and for the Metropolitan Board of Equalization was June 26, and you can appeal to the State Board of Equalization generally by August 1 or within 45 days of the county board's notice, whichever is later.

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Do you need a real estate attorney to close in Tennessee?

None of the Tennessee sources read requires a lawyer at a home closing. A 2007 Attorney General opinion (07-88) says preparing deeds, deeds of trust and sale contracts is not the practice of law, though it can be law business when it takes a lawyer professional judgment.

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What must a home seller disclose in Tennessee?

Tennessee's Residential Property Disclosure Act (Tenn. Code Ann. 66-5-201 and following) covers one- to four-unit homes and prescribes a disclosure form in 66-5-210. The article does not summarize the sections on alternatives to the form, exemptions, or buyer remedies.

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How does foreclosure work in Tennessee?

Most Tennessee foreclosures happen by advertisement, without a court case, according to the Tennessee Housing Development Agency. Under Public Chapter 515, effective July 1, 2025, the sale must be advertised in a newspaper at least 2 times, starting 20 days before the sale, plus online for 20 days.

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What first-time home buyer programs does Tennessee offer?

In Tennessee, the Tennessee Housing Development Agency (THDA) offers the Great Choice Home Loan with optional Great Choice Plus down payment help of up to $15,000, or up to $25,000 for newly built homes.

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Is Tennessee a community property state?

Tennessee is not a community property state. Since July 1, 2010, spouses can choose community property treatment by placing property in a trust under the Tennessee Community Property Trust Act (T.C.A. 35-17-101 and following).

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How much tax when you sell a home in Tennessee?

The federal rule is the same in Tennessee as in every state: if you owned and lived in the home as your main home for at least 2 of the last 5 years, the first $250,000 of gain is excluded, $500,000 for a married couple filing jointly (Section 121, IRS Publication 523). Bought $400,000, sold $750,000: a single owner has $100,000 of taxable gain, $15,000 of federal tax at the 15% long-term rate; a couple filing jointly owes nothing. Tennessee income tax on the gain is not computed here.

Capital gains on a home sale

Tennessee guides

Nashville

Buying a home in Nashville, Tennessee

Professionals in Tennessee

All states · Federal guides