The Tennessee transfer tax is $0.37 for every $100 of a property’s sale price or fair market value, whichever is higher, and the buyer owes it when the deed is recorded. On a $450,000 home, that comes to $1,665. The rate is the same in every county, and buyers who are financing the purchase pay a separate mortgage recordation tax on top of it.
How to Calculate What You Owe
For a standard sale of land or a home (what the statute calls a “freehold estate”), the county register applies the $0.37-per-$100 rate to whichever is greater: the price actually paid or the property’s fair market value at the time of transfer.1Justia. Tennessee Code 67-4-409 – Recordation Tax
Divide the taxable figure by 100, then multiply by 0.37. A $325,000 sale produces $1,202.50. A $600,000 sale produces $2,220. Because the tax uses the greater of value or consideration, selling to a family member below market doesn’t cut the bill — the register uses the property’s actual market value instead.2Tennessee Department of Revenue. Recordation Tax Manual
Quitclaim Deeds Are Taxed Differently
A true quitclaim deed, which transfers only whatever interest the grantor might hold without any warranty of title, is taxed on the consideration paid rather than on market value. Pay $10 for a quitclaim, and the tax is calculated on $10. But if the deed’s language actually conveys the property itself or includes a warranty, the register treats it like a standard deed and taxes the full fair market value.3Tennessee Department of Revenue. REC-20 – Tax Base for Quit Claim Deed Using a quitclaim form while including warranty language defeats the tax advantage.
Leasehold transfers sit outside the tax entirely. Assigning a lease rather than conveying the underlying land does not trigger the $0.37-per-$100 rate.2Tennessee Department of Revenue. Recordation Tax Manual
Who Pays
The statute puts the transfer tax on the grantee, meaning the buyer, and the county register collects it when the deed is submitted for recording.4Tennessee Department of Revenue. REC-11 – Transfer Tax – Responsible Party for Paying and Collecting The purchase agreement can shift who actually writes the check at closing. Sellers sometimes agree to cover the tax as a concession, especially in a slow market. If the contract says nothing, the buyer pays.
Transfers That Are Exempt
Several categories of real estate transfers can be recorded without paying the transfer tax. Most exemptions involve family, estate planning, or government transactions:
- Conveyances between spouses, including creating or dissolving a tenancy by the entirety.
- Deeds or decrees adjusting property rights between divorcing parties.
- Property moved into a revocable living trust you or your spouse created, or transferred back out to you or your spouse.
- Deeds by an executor carrying out a will, or by a trustee distributing property to trust beneficiaries.
- Deeds dividing land formerly held as tenants in common into separate parcels.
- Releases of a life estate to the holders of the remainder interest.
- Transfers connected to corporate mergers, consolidations, or sales of substantially all corporate assets under a reorganization plan.
- Any recording where a municipality, state agency, county, utility district, school district, or similar governmental body is the grantee.
An exempt transfer still owes the standard recording fees; the exemption only wipes out the transfer tax itself. Exempt transactions also skip the oath of value.1Justia. Tennessee Code 67-4-409 – Recordation Tax
The Oath of Value
Tennessee requires the buyer (or the buyer’s agent or trustee) to state under oath, directly on the face of the deed, the actual consideration or value of the property, whichever is greater. The sworn statement is made either in front of the county register or before a notary or other officer authorized to administer oaths.1Justia. Tennessee Code 67-4-409 – Recordation Tax
Knowingly making a false statement about consideration or value on this oath is punishable as perjury under state law.1Justia. Tennessee Code 67-4-409 – Recordation Tax Confirm the value before signing.
The Separate Mortgage Tax
Buyers who finance the purchase face a second recordation tax. Tennessee charges $0.115 per $100 of indebtedness on every mortgage, deed of trust, or similar security instrument recorded in the county. The first $2,000 of the loan is exempt.1Justia. Tennessee Code 67-4-409 – Recordation Tax
On a $360,000 mortgage, subtract the $2,000 exemption for $358,000, divide by 100, and multiply by 0.115. The mortgage tax comes to $411.70. Unlike the transfer tax, the statute puts the mortgage tax on the borrower.1Justia. Tennessee Code 67-4-409 – Recordation Tax When budgeting closing costs, add the transfer tax and the mortgage tax together to see the full recordation bill.
How It Affects Your Federal Taxes
You cannot deduct the Tennessee transfer tax as a real estate tax on your federal return. The IRS specifically lists transfer and stamp taxes among the items homeowners cannot deduct.5Internal Revenue Service. Publication 530 (2025), Tax Information for Homeowners
The tax still matters when you sell. A seller who pays it can treat it as a selling expense, which lowers the amount realized and reduces any taxable gain. A buyer who pays it adds it to the cost basis in the property, which reduces gain on a later sale.6Internal Revenue Service. Publication 523 (2025), Selling Your Home On a $450,000 purchase where the buyer paid $1,665 in transfer tax, that $1,665 becomes part of the basis. Keep the closing statement with your tax records so the figure is there when you need it.