Buying or selling in Townsend comes with a lot of line items at closing, and transfer and mortgage taxes can be the most confusing. You want a clear, local answer so you can plan your cash to close and avoid surprises. In this guide, you will learn what these taxes are in Tennessee, how Blount County collects them, who typically pays, and how to estimate your numbers with simple examples. Let’s dive in.
What these taxes are in Tennessee
Tennessee charges two state taxes when documents are recorded with the county:
- Transfer tax on deeds when property changes hands.
- Mortgage or indebtedness tax on instruments that secure a loan, such as a deed of trust.
Both are described in Tennessee Code Annotated § 67‑4‑409, which also requires payment before the Register of Deeds will record your documents. You can review the statutory language in Tennessee Code § 67‑4‑409.
Current tax rates
- Transfer tax: 0.37 percent. That is $0.37 for every $100 of the home’s price or fair market value, whichever is higher.
- Mortgage tax: 0.115 percent. That is $0.115 for every $100 of the principal amount recorded, after subtracting the first $2,000, which is exempt.
The Register collects these taxes at recording. The office will not record a deed or deed of trust until taxes are paid and the required value information is provided under oath.
Who pays at closing in Townsend
- Transfer tax: By statute, the grantee or transferee is responsible, which means the buyer in a typical sale. Your purchase contract can allocate costs differently if both sides agree. See the collection rules in Tennessee Code § 67‑4‑409.
- Mortgage tax: The borrower usually pays this tax because it applies to the recorded loan amount. Parties can negotiate otherwise, but closing practice typically places it on the buyer’s side.
Your title company will show both taxes, plus recording fees, on the Closing Disclosure.
How to estimate your taxes
Use these quick formulas:
- Transfer tax = 0.0037 × the greater of your contract price or fair market value.
- Mortgage tax base = loan amount minus $2,000 exemption. Mortgage tax = 0.00115 × the taxable loan amount.
Example: Typical Townsend purchase
- Home price: $350,000. Transfer tax = 350,000 × 0.0037 = $1,295.00.
- Loan amount: $280,000. Taxable base = 280,000 − 2,000 = 278,000. Mortgage tax = 278,000 × 0.00115 = $319.70.
These figures do not include local recording fees. See below for Blount County’s current fee structure.
Blount County recording and local fees
For Townsend properties, the Blount County Register of Deeds in Maryville computes and collects the state taxes and local recording fees at the counter. The county lists per‑document and per‑page charges on its site. Review the latest schedule on the Blount County Register of Deeds page.
Common items you may see:
- Recording fee for deeds: a base amount for the first pages, plus a per‑page amount for additional pages.
- Recording fee for deeds of trust: similar per‑page structure.
- A $1 receipt fee when a document has taxable amounts.
- A $1 clerk fee when taxes are collected.
Because per‑page fees depend on document length, your title company will total these once your deed and loan documents are finalized.
Oath of consideration and accurate values
Tennessee requires an oath or sworn statement of the consideration or value on the instrument that is recorded. The Register will refuse to record until the oath and taxes are satisfied. The law also penalizes false statements. See the oath and collection provisions in Tennessee Code § 67‑4‑409.
Exemptions and special cases
Some transfers are exempt from transfer tax under specific conditions, such as certain transfers between spouses, deeds related to divorce, executor or court‑ordered deeds, and transfers to or from government entities. Exemptions depend on the facts and the deed language. Always document the basis for any exemption so the Register can confirm eligibility. Review the exemptions listed in Tennessee Code § 67‑4‑409.
Quick closing checklist
- Pre‑closing: Confirm your contract price and whether any part of the deal involves non‑cash items. If the price is below market, your title company may request an appraisal or other support because tax is based on the higher of price or fair market value.
- Documents: Identify any claimed exemption early and collect supporting paperwork for the Register.
- Closing Disclosure: Make sure the transfer tax, mortgage tax, deed recording fee, and mortgage recording fee are itemized. Confirm the first $2,000 mortgage exemption is applied.
- Recording: Ensure the deed includes the required oath of consideration.
- After recording: Keep your tax receipts and instrument numbers in case the county audits or requests additional information.
Plan your numbers with a local guide
When you know how Tennessee’s transfer and mortgage taxes work, you can budget with confidence and negotiate closing costs with clarity. If you want a precise estimate for your Townsend purchase or sale, or you need help reviewing your Closing Disclosure, reach out. Michael Grider is happy to walk you through every line item.
FAQs
Who pays Tennessee’s transfer tax on a Townsend home sale?
- By statute the buyer is responsible for the transfer tax, but your contract can allocate it differently; confirm what your Closing Disclosure shows for your deal.
What is the mortgage recording tax on a $200,000 loan?
- Subtract the $2,000 exemption, then apply 0.115 percent: 198,000 × 0.00115 = about $227.70, plus standard recording fees.
How is the transfer tax calculated if my price seems low?
- Tennessee uses the greater of the contract price or fair market value, so your title company may request support for value if the price is below market.
Can I claim an exemption from transfer tax in Blount County?
- Certain transfers qualify under state law, but eligibility depends on the facts and deed language; provide documentation so the Register can confirm the exemption.
Will the county record my deed before I pay taxes?
- No; the Register of Deeds will not record until required taxes are paid and the oath of consideration or value is properly provided.
