5 Things to Know About Your Tennessee Taxes

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By Rochford Law Posted on July 2, 2021 at 12:09 PM

Real estate isn't as straightforward as it appears. It can sometimes be challenging to learn all about Tennessee taxes and the requisite paperwork, property inspections, etc.

A real estate attorney can assist you with your state taxes since there is a lot to do to ensure a smooth transfer of property. If you are considering purchasing or selling a residential property, you should understand the state taxes involved. Your real estate property sale can be more successful with the right legal guidance.

Here are five things you need to know about taxes in Tennessee:

  • Due Dates
  • Tax Transfers
  • Capital Gains Taxes
  • Property Taxes
  • Tennessee Residential Real Estate Attorney

Due Dates

A thorough understanding of your state's tax laws is extremely important when selling a residential property. Having an attorney on your side can help ensure that you cover everything you need to in order to achieve a successful sale. In the process of listing a home, homeowners frequently encounter problems with the tax due date. In addition to paying taxes you owe as a result of the sale of your house, you must also pay capital gains tax within the tax deadline for the same year.

Get a free consultation with Rochford Real Estate Law Title to work with a real estate attorney today.

Tax Transfers

The Tennessee transfer tax should also be considered when buying or selling a house in Tennessee. Deed transfer taxes in Tennessee are generally borne by the buyer. In real estate transactions, lawyers can ensure that clients hold the right parties accountable for their portions.

State transfer taxes are charged by Tennessee at a rate of $0.37 per $100 of the sale price of a property. Real estate transactions are not subject to transfer taxes exceeding $100,000. A home valued at $300,000 is subject to a deed transfer tax of about $1,100 once transferred across state lines.

Capital Gains Taxes

The capital gains tax in Tennessee is based on the appreciation of your home’s value during your ownership, and therefore determines your profit when selling. In other words, capital gains are determined by the difference between the purchase price of your home and the sale price. Depending on your income, you will eventually have to pay this tax rate. In most states, you can apply for capital gains tax at a rate of 0 to 15 percent and up to 20 percent.

Many homeowners who sell their home will be able to claim a tax-free capital gains rate of up to $250,000 under federal tax law. A tax attorney can help you determine the taxes you may owe based on your income and the listing price of your real estate property.

Property Taxes

Real estate sales and purchases can be complicated by property taxes. Considering these factors, Tennessee assesses an effective rate of 0.73% on real estate. In addition to your property valuation, you must consider the local county tax rates in determining your specific property taxes.

It is critical to hire a local real estate attorney to secure the right information regarding your specific property taxes since taxes can differ from state to state and property to property. However, be sure to also keep an eye on any recent changes in your specific state and local county government, as tax reform bills are always changing and being reworked.

Tennessee Residential Real Estate Attorney

Are you in need of assistance understanding the taxes associated with your real estate property sale or purchase? Hiring an experienced real estate attorney like Rochford Law & Real Estate Title in Nashville, TN can save you time and money in the long run. It’s best to cover all your bases and get through a real estate transaction with as little problems as possible. However, it’s comforting to know that should a dispute pop up, a real estate attorney can help find a resolution.

Contact Rochford Law & Real Estate Title today!

Topics: Property Tax, Real Estate Attorney, Real Estate Law, Real Estate Lawyer