An affiliate broker in Tennessee is advising her seller client about closing costs before listing a Chattanooga property for $425,000. The seller asks whether the Tennessee realty transfer tax will be calculated on the listing price or the actual sales price. The affiliate broker should correctly advise that the transfer tax is calculated based on which of the following?
Correct Answer
D) The actual consideration paid for the property as stated in the deed, rounded up to the next $100 for purposes of the tax calculation
Under Tenn. Code Ann. § 67-4-409, the Tennessee realty transfer tax is imposed on the actual consideration paid for the property — that is, the actual sales price as reflected in the deed. The tax is then calculated by dividing the consideration by $100, rounding any fraction up to the next whole unit, and multiplying by $0.37. The listing price is irrelevant; it is the actual closing price that determines the tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
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- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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