Do You Pay Sales Tax On a House in Tennessee?
There are a lot of different costs that come with purchasing a home. You need to come up with the down payment, work through the inspection and the appraisal, and often you will have other costs that come with handling the title and more on your sale. Many potential homeowners wonder whether they will need to pay any type of sales tax when they purchase a home.
As Realtor Elizabeth Leanza explains, you will need to pay a sales tax on any purchase of a home in Tennessee. They are an expert Franklin, TN real estate agency that has helped many people through the home buying process. This usually goes by the name of a transfer tax that comes with getting the deed changed from the previous owner’s name to your own. The buyer is the one who will pay this unless the contract states differently. The current amount for this tax is 0.37 for every hundred dollars on the sales price on the home.
There are many costs that the buyer has to consider when they are purchasing a new home. Understanding these costs and being prepared will make a world of difference in the way that the sales process goes.
Do You Pay Sales Tax On a House in Tennessee?
Buying a new home is a big deal. You may have spent months saving up the money that you need for the purchase and then considering what features are the most important to you. You may look at a lot of homes with your realtor, try different neighborhoods, and put in a lot of bids during the process. Finally, the offer is accepted and it is time for the work with the mortgage part of the whole process.
There are a number of costs that the future homeowner will need to consider before they jump in. Along with the down payment, the buyer will need to look closely at some of the closing costs that they may have to pay before they can close on the home. Many may wonder whether they need to pay any type of sales tax on the home.
While you do not technically pay a sales tax, you will pay something similar as the buyer known as the transfer tax. You can work with the seller to get credit for this in some buyers’ markets, but it is usual for the buyer to pay it. This fee is done when it is time to transfer the deed of the home from the previous owners to the new homeowner and has to be paid before this is done.
What amount will this be? The deed transfer tax can change at any time, but the current amount is 0.37 per every hundred dollars of the sales price. This means that you will pay it based on what the final price of the home is, which does turn it into a type of sales tax as well. You can pay this within your closing costs to keep it all in one place.
What Other Costs Do I Need to Pay for a New Home?
Along with the transfer tax, there are other fees that a buyer will need to pay in order to get the new home they want. First, they will need to pay a down payment. Most loans will require some kind of down payment before giving the mortgage. The closer the buyer can get to the 20%, the easier it is to get the mortgage that they want. There are other mortgage options that will allow you to put less money down if you need.
There are also other closing costs that you will need to consider. These can include money for your title exchange and a search on the title to make sure the sale is good, the appraisal fee, the inspection, and any fees that you are going to pay to the mortgage company for getting the loan going.
When all of these come together, you will be able to get the closing costs and understand how much you will owe before getting the home.
You can talk to your mortgage lender to figure out how much the costs will be on the loan. They should be able to give you an idea. Keep in mind that many require you to pay some of the taxes and home insurance ahead of time, which will be added costs that you will need to pay in order to close on the home of your dreams.
Choosing The Right Home for Your Needs
Before you jump into a new home purchase in Tennessee, you need to consider whether you have the funds to help out with this. The right funds will ensure that you are able to handle the down payment and all of the necessary closing costs so you can get into your new home without problems.
