Buying and selling a piece of residential property isn’t as easy as it seems. Along with tons of paperwork, property inspections and many other important steps, understanding everything you need to know about Tennessee taxes can sometimes be a challenge.
As there is a lot of ground to cover, a real estate attorney will be able to help you navigate your state taxes to allow for a seamless transfer of property. Understanding your state taxes associated with the purchase or sale of your residential property doesn’t have to be as challenging thank you might think. With the right legal guidance, you will be able to get the most out of your real estate property sale.
Here’s what you need to know to understand home sale taxes in Tennessee:
- When are Taxes Due?
- Transfer Taxes
- Capital Gains Taxes
- Property Taxes
- Tennessee Residential Real Estate Attorney
when are taxes due?
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.
Pro Tip for Tennesseans: If you sell your home on February 10, 2021, you would then have to pay those taxes when you file your 2021 tax returns. These would then be due April 15, 2021.
Get a free consultation with Rochford Real Estate Law Title to work with a real estate attorney today.
transfer taxes
Another tax to be aware of when buying or selling your residential property in Tennessee is transfer taxes. Generally speaking, the buyer will pay for the deed transfer taxes in Tennessee. A real estate attorney can help ensure the right parties are held accountable for their portions in the final transaction.
For example: In Tennessee, the state charges a transfer tax rate of $0.37 for every $100 of the property sale price. Transfer taxes on a real estate transaction may not exceed $100,000. For a home valued at $300,000, once transferred, the buyer or seller will be required to pay the state about $1,100 in deed transfer taxes.
capital gains taxes
Similarly, in Tennessee, the capital gains tax focuses on the appreciation that eventually becomes your profit when you sell your home. The difference between the price you paid for your home and the price you sold it for equals your capital gains. This tax rate will eventually have to be paid depending on your income. Rates for the capital gains tax varies between 0 to 15 and up to 20 percent.
For many people selling their home, federal tax law will allow for the first $250,000 in capital gains to go tax-free. Depending upon your income and the listing price of your real estate property, an attorney will be able to help you determine the taxes you owe, if any.
property taxes
Your property taxes can create a lot of confusion surrounding your real estate sale or purchase. With that in mind, the state of Tennessee requires an effective real estate tax rate of 0.73%. Your specific property taxes will depend on the evaluation of your property in combination with your local county tax rates.
While taxes can vary from state to state and from property to property, enlisting the help of a local real estate attorney will equip you with the right information on your property and your specific property taxes. 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 litigation attorney can help find a resolution.
Contact Rochford Law & Real Estate Title today!
