Robert is purchasing a commercial warehouse in Chattanooga from a private seller for $1,200,000. The Tennessee realty transfer tax applies to this transaction. Which statement correctly identifies how the tax base is determined under Tennessee law?
Correct Answer
D) The tax is based on the actual consideration paid for the property transfer
Under Tenn. Code Ann. § 67-4-409, the Tennessee realty transfer tax is calculated based on the actual consideration — that is, the actual sales price paid for the property. In this case, the tax would be calculated on the $1,200,000 purchase price, not on any assessed, appraised, or mortgage-related value.
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Related Topics & Key Terms
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Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
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