Closing costs can feel like a moving target. If you are buying or selling in Oak Hill, two small yet important line items often raise questions: Tennessee’s realty transfer tax and mortgage tax. Understanding how these taxes work helps you plan with confidence and avoid surprises at the closing table. In this quick primer, you will learn what each tax is, who typically pays, how Davidson County recording fees show up, and how to estimate your total. Let’s dive in.
Transfer and mortgage tax basics
Transfer tax: what it is
Tennessee imposes a state realty transfer tax when a deed is recorded. The rate is $0.37 per $100 of the greater of the consideration paid or the property’s market value. You will see this noted as $3.70 per $1,000 on closing statements. See the statutory rules in Tennessee Code Annotated § 67-4-409 for rate and valuation details. Review the statute here.
Mortgage tax: what it is
If you finance your purchase, Tennessee also levies a mortgage recordation tax when the deed of trust is recorded. The rate is $0.115 per $100 of indebtedness, after an automatic exemption on the first $2,000 of the loan amount. That is often shown as $1.15 per $1,000 over the first $2,000. The statute outlines calculation, exemptions, and required loan disclosures. See § 67-4-409.
Who pays at closing
By statute, the buyer (grantee) is responsible for transfer tax and the borrower (mortgagor) is responsible for mortgage tax. Your purchase contract can allocate transfer tax differently if both parties agree, but the Register will require the taxes to be paid before recording. Source: § 67-4-409.
When and where you pay
Both taxes are collected by the county Register of Deeds at the time of recording, and documents are not recorded until taxes and fees are paid. Title companies or closing attorneys usually calculate and remit these amounts on your behalf, and they appear on your Closing Disclosure or settlement statement. For an overview of Tennessee recordation taxes, see the Tennessee Department of Revenue’s guidance and the Davidson County Register of Deeds fee page.
Davidson County fees to expect
Recording fees
Davidson County charges standard recording fees that apply to Oak Hill properties. Expect $5 per page with a $10 minimum, plus a $2 data-processing fee for many document types. You will see these county fees alongside the state taxes on your closing statement. Check the county fee schedule.
Listed state tax rates on county page
The county also lists the state tax rates it collects: Conveyance (transfer) tax: $3.70 per $1,000 and Mortgage tax: $1.15 per $1,000 over the first $2,000. See the Register of Deeds page.
Small ancillary fees
When a state tax is paid at recording, a small $1 receipt or clerical fee may apply. This is permitted under Tennessee law and is often itemized with the recording charges. Review § 67-4-409.
Exemptions and special cases
- Transfers that are commonly exempt from transfer tax include certain deeds between spouses, deeds implementing a will, some trust transfers involving a revocable living trust, deeds adjusting property in a divorce, and deeds dividing interests among co-owners. The statute controls the specific criteria. See § 67-4-409.
- Quitclaim deeds are taxed based on the actual consideration stated, and specific deed language affects how a document is treated. See the statute.
- Some instruments are not subject to the mortgage tax, including certain judgment liens, contractor liens, and specific UCC filings and reverse mortgages. Details in § 67-4-409.
- If collateral spans multiple states, the mortgage tax can be apportioned to the Tennessee collateral based on a stated ratio, and the instrument must disclose the maximum indebtedness. See § 67-4-409.
- An oath of value is required for deeds. False statements can carry legal penalties, and the Register will not record until taxes and fees are paid. Source.
How to estimate your cost
Use these simple formulas to size your budget:
- Transfer tax = sale price × 0.0037. Statute reference
- Mortgage tax = (loan amount − $2,000) × 0.00115. Statute reference
Examples:
- Example 1: Sale price $500,000. Transfer tax = $1,850. If you finance $400,000, mortgage tax = ($400,000 − $2,000) × 0.00115 = $457.70.
- Example 2: Sale price $3,000,000. Transfer tax = $11,100. If you finance $2,500,000, mortgage tax = ($2,500,000 − $2,000) × 0.00115 = $2,872.70.
Add county recording charges on top of the taxes. In Davidson County, page fees are modest compared to the taxes, but they will appear on your Closing Disclosure. See the fee schedule.
Oak Hill closing tips
- Confirm in writing who pays the transfer tax. The statute places it on the grantee, but your contract can allocate it differently. See § 67-4-409.
- Ask your title company to provide exact calculations for both taxes and all Davidson County recording fees. They typically collect and remit at recording. County fee page
- Provide accurate sale consideration and loan details early. Expect an oath of value for deeds and clear statements of indebtedness for loans. Statute reference
- If your deal involves a trust, marital transfer, divorce settlement, or multi-state collateral, share documents with the title officer ahead of time to confirm any exemptions or apportionment. See § 67-4-409
Planning a sale or purchase in Oak Hill and want a clear, line-by-line closing estimate tailored to your deal structure and timing? Reach out to Anna Rose Marangelli for a personalized walkthrough and strategic guidance from contract to closing.
FAQs
Who pays Tennessee realty transfer tax at closing?
- By statute, the buyer (grantee) is responsible, but the purchase agreement can allocate payment differently as long as the tax is paid at recording. See § 67-4-409
How is Tennessee mortgage tax calculated on Oak Hill loans?
- It is $0.115 per $100 of indebtedness after exempting the first $2,000 of the loan amount, often shown as $1.15 per $1,000 above $2,000. Statute reference
When are these taxes and fees collected in Davidson County?
- The Register of Deeds collects them at recording, and documents are not recorded until payment is made. Title companies usually calculate and remit at closing. County overview
What recording fees should I expect in Davidson County for a deed?
- Expect $5 per page with a $10 minimum plus a $2 data-processing fee, and a small $1 receipt fee when a state tax is paid. See the county fee schedule
Are family or trust transfers exempt from Tennessee transfer tax?
- Many are, including certain deeds between spouses, deeds under a will, some transfers to or from a revocable trust by the same transferor, and divorce-related transfers, subject to statutory conditions. Details in § 67-4-409
