Did you know that in the last year, 23% of houses were purchased by first time home buyers? With this in mind, buying and selling a piece of residential property might not be as easy as it seems. One hurdle to overcome is understanding your taxes. Understanding Tennessee taxes is often difficult due to the paperwork involved and the property inspections.
Considering the amount of ground to cover, a real estate lawyer can guide you through your state taxes so the transfer of property proceeds without any problems. It's not as difficult as you might think to understand your state taxes related to the purchase or sale of your residential property. Choosing the right legal counsel will ensure that you get the most out of your real estate transaction.
Here’s what you need to know to understand home sale taxes in Tennessee:
- Due Dates
- Tennessee Property Tax Types
- Tennessee Residential Real Estate Attorney
Due Dates
With any residential property sale, understanding your specific state taxes is extremely important. In order to ensure a successful sale of your property, a real estate attorney can ensure that you are covering everything you need to. One of the first troubles homeowners run into when attempting to list their home has to do with when taxes are due. A critical part of the home sale process, any capital gains taxes that you owe because of the sale of your house will need to be paid at 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.
Tennessee Property Tax Types
Transfer Taxes
Transfer taxes are another tax to be aware of when you are buying or selling a residential property in Tennessee. Generally, the buyer is responsible for paying the Tennessee deed transfer tax. Real estate attorneys can help ensure that the right parties are held accountable for their roles in the final transaction. According to Tennessee law, for every $100 of the sale price of a property, a transfer tax rate of $0.37 applies.
Capital Gains Taxes
Tennessee also taxes capital gains as it represents the appreciation that becomes your profit when you sell your home. Capital gains are the difference between the price you paid for your home and the price you sold it for. Depending on your income, you will eventually be required to pay this tax rate. Capital gains taxes typically range from 0 to 15 percent but can be up to 20 percent.
Most people selling their homes can declare their first $250,000 worth of capital gains tax-free under federal tax law. An attorney can help you determine the taxes you owe, if any, depending on your income and the listing price of your property.
Property Taxes
Your property taxes can create a lot of confusion surrounding your real estate sale or purchase. The attorneys of a skilled title company can help you determine what you owe depending on your property. Therefore, the Tennessee state property tax rate should be 0.73%. Based on the assessment of your property and the county tax rates in your area, your property taxes will vary.
In the event that your state and your property taxes differ from one another, consulting a local real estate lawyer will offer you the necessary information for your particular property. Keep an eye, however, on any changes in your state and local government, as tax reform bills are constantly changing and being revised.
Tennessee Residential Real Estate Attorney
If you are a first time home buyer or a seasoned real estate professional, an effective title company can be the help you’ve been looking for. 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. With so many varying taxes, paperwork and more, having a legal representative on your side will prove to be important. However, it’s also comforting to know that should a dispute pop up, a real estate litigation attorney can help find a resolution.
Contact Rochford Law & Real Estate Title today!
