Costs of Selling Land in Tennessee
Here is what a land seller usually pays in this state, from transfer tax to capital gains. When you sell to us, we pay the closing costs and you pay no fees or commissions.
- Cash offer in 24 hours
- No fees or commissions
- We pay closing costs
- Close in as few as 7 days
Seller Costs in Tennessee at a Glance
| Cost | Typical amount | Who usually pays |
|---|---|---|
| Realty transfer tax | $0.37 per $100 of price or value, whichever is greater | Buyer (grantee) by statute |
| Recording fees | Set by the county recorder; charged per document or page | Buyer usually records the deed; seller pays to record lien releases |
| Title search and owner's title insurance | Priced by the title company or attorney; varies with sale price | Set by the contract and local custom |
| Prorated property taxes | Your share of the current year's tax, up to the closing date | Seller for the days owned; unpaid back taxes are paid from the sale |
| Federal capital gains tax | 0%, 15% or 20% of a long-term gain (land held over 1 year); short-term gains taxed as ordinary income; 3.8% NIIT may apply at higher incomes | Seller, on the gain only |
| Tennessee income tax on the gain | None for individuals; the Hall tax was repealed for periods from 2021 | n/a |
Example: Seller Costs on a $25,000 Land Sale
- Transfer tax owed by the seller
- $0
- Total seller transfer cost
- $0
The tax is $25,000 / $100 = 250 x $0.37 = $92.50, but the buyer owes it under Tennessee law. Recording, title and prorated taxes are not included.
Selling Costs in Tennessee: What to Know
In Tennessee the transfer tax is owed by the buyer, not the seller, and there is no state income tax on your gain. That makes seller costs light. This page lists each cost and who usually pays it, with a $25,000 example.
Most of these costs come out of your proceeds at closing, so you see them on the settlement statement, not as bills. The one cost that comes later is income tax on any gain, which you report on your return. This page is general information, not legal or tax advice. Rates change, so confirm them with the office named here or a tax professional before you rely on them.
Tennessee realty transfer tax
Tennessee taxes the recording of a transfer at 37 cents per $100 of the price or the value of the land, whichever is greater. The statute says the grantee, which is the buyer, pays it (Tenn. Code 67-4-409; TN Department of Revenue manual).
The county register of deeds collects the tax. A contract can still shift the cost, so read who pays what before you sign.
Who pays what in Tennessee
Tennessee law puts the transfer tax on the buyer, and the buyer usually pays to record the deed. The seller usually pays for the deed preparation, payoff of liens, and the seller's share of the year's property tax. Title costs are split as the contract says.
- Seller: deed preparation, any commission, payoff of liens and back taxes, and the seller's share of the year's property tax.
- Buyer: the realty transfer tax, recording the deed, and lender costs if any.
- Either side: title insurance and the closing fee, as the contract says.
Attorney or title company: who closes a land sale in Tennessee
In Tennessee, most land sales close through a title company or an escrow or settlement agent. The closing agent orders the title search, prepares the settlement statement, collects the transfer tax and recording fees, pays off liens and back taxes, and sends you your money.
You can hire a real estate lawyer at any time to review the contract or the deed, and a lawyer is worth it when the title has problems, when heirs own the land together, or when an estate is still open. The contract says who pays the closing agent's fee.
Capital gains tax when you sell land in Tennessee
Federal tax applies to the gain, not to the sale price. The gain is roughly the sale price minus what you paid for the land, minus selling costs and the cost of lasting improvements. If you held the land for more than one year, the gain is long term. If you held it one year or less, it is short term and is taxed like wages (IRS Topic 409).
Long-term gains get federal rates of 0, 15 or 20 percent, depending on your taxable income. For 2025, a single filer paid 0 percent on long-term gains if taxable income was $48,350 or less. Higher earners may also owe the 3.8 percent net investment income tax when modified adjusted gross income passes $200,000 for single filers or $250,000 for joint filers (IRS Topic 559).
Tennessee has no individual income tax. The Hall income tax on interest and dividends was repealed for tax periods beginning on or after January 1, 2021 (TN Department of Revenue). Federal tax still applies to your gain.
Recording, title and property tax at closing
Recording fees are set by law and charged by the county office that records deeds. The buyer usually pays to record the new deed. If a mortgage or lien is paid off at closing, the release is recorded too, and the seller usually pays for that.
A title search shows who owns the land and what liens or back taxes sit on it. Owner's title insurance protects the buyer against title problems found later. The price comes from the title company or attorney, and the contract says who pays.
Property tax is split by date. You pay for the part of the year you owned the land, and the buyer pays for the rest. Any back taxes are paid from your proceeds before you get the balance.
How selling to a cash buyer changes the costs
A cash sale has no lender, so there are no loan fees, no appraisal and no financing delays. When you sell to EasyLotBuyer, we pay the closing costs, and you pay no fees or commissions. We can close in as few as 7 days, and we send a cash offer within 24 hours.
We also buy land with back taxes, liens, title problems or no road access, and land held by heirs or an estate. Back taxes are paid at closing from the sale. Tax on your gain is still yours to report, so keep your closing statement for your return. Get a cash offer for your Tennessee land.
Sources
Rules and fees change; check with the county before you act on them.
Selling Cost Questions in Tennessee
Who pays the transfer tax in Tennessee?
The buyer. Tennessee law puts the 37 cents per $100 tax on the grantee, though a contract can shift it.
How much is the Tennessee transfer tax on a $25,000 lot?
$92.50, which is 37 cents for each $100 of the price. It is owed by the buyer under state law.
What closing costs does a seller pay in Tennessee?
Usually no transfer tax, since the buyer owes it by law, plus payoff of any liens or back taxes and the seller's share of the year's property tax. Title and closing fees are split as the contract says.
Do I owe capital gains tax when I sell land in Tennessee?
Only federal tax for individuals. Tennessee has no individual income tax, so the state does not tax your gain.
Who pays closing costs when I sell land for cash?
It depends on the contract. When you sell to EasyLotBuyer, we pay the closing costs and you pay no fees or commissions. Back taxes, if any, are paid from the sale at closing.
Are back taxes paid at closing?
Yes. The closing agent pays delinquent property taxes and recorded liens from the sale proceeds, and you receive the balance. You can sell land that has back taxes.