If you are buying or selling real estate in Clarksville, Tennessee, you will usually see two separate state charges connected to the closing: the Tennessee transfer tax on the purchase price and the mortgage or recordation tax on the loan amount. In Clarksville practice, the seller typically pays the transfer tax, while the buyer typically pays the mortgage recordation tax, although your purchase contract should confirm the final allocation.
For Tennessee transactions, the transfer tax is $0.37 per $100 of the purchase price, or $37 per $100,000, with the first $2,000 of the purchase price excluded. The mortgage or recordation tax is $0.115 per $100 of the loan amount over $2,000, and the Tennessee recordation tax is capped at $5,000.
What is Tennessee transfer tax?
Tennessee transfer tax is a state charge associated with recording a deed that transfers real property from the seller to the buyer. It is calculated from the purchase price and appears as a separate line item among the closing charges.
Under Tennessee Code Annotated § 67-4-409, Tennessee imposes a realty transfer tax on qualifying real estate transfers. The Tennessee Department of Revenue also provides recordation tax guidance and current rates.
The practical formula is:
Purchase price minus $2,000, divided by $100, multiplied by $0.37
For example, a $100,000 purchase produces a transfer-tax charge of approximately $37 under the rate provided for this guide.
Who usually pays Tennessee transfer tax in Clarksville?
In Clarksville and Montgomery County transactions, the transfer tax is typically allocated to the seller as a matter of local closing practice. That is a customary allocation, not a substitute for reviewing the contract.
Your offer, counteroffer, and final purchase agreement should state who is responsible for transfer taxes and other closing expenses. A buyer may agree to pay a seller’s customary expense as part of a negotiated offer, particularly when competing against other buyers or requesting a different seller concession.
If the contract is silent or unclear, ask your real estate agent and closing professional to explain how the charge will be handled before you sign.
What is Tennessee mortgage or recordation tax?
Tennessee’s mortgage recordation tax, also called the indebtedness tax, applies to the loan or debt secured by a recorded mortgage or deed of trust. It is separate from the transfer tax because it is based on the amount borrowed rather than the purchase price.
The rate is:
$0.115 per $100 of loan amount over $2,000
This means a buyer borrowing $200,000 would generally calculate the tax on $198,000 after excluding the first $2,000 of indebtedness.
The mortgage recordation tax is usually treated as a buyer expense because the buyer is obtaining the loan and recording the deed of trust. It is also separate from the county’s recording fee, lender charges, and title insurance premium.
Is the mortgage recordation tax the same as the recording fee?
No. These are separate charges.
- Mortgage recordation tax: A state tax calculated from the loan amount.
- Recording fee: A fee charged by the county register for recording the deed, deed of trust, and related documents.
- Title insurance premium: The cost of an owner’s or lender’s title insurance policy.
- Settlement or closing fee: A charge for coordinating the closing, preparing documents, and completing the transaction.
You may see all of these expenses near one another on your closing paperwork, but they are not interchangeable. Haus’s guide to what buyers should budget for Clarksville closing costs explains how these charges fit into the larger cash-to-close calculation.
How much are Tennessee transfer and recordation taxes on a $336,900 home?
Assume you are buying a Clarksville home for $336,900 and financing 80% of the purchase price.
Transfer tax calculation
Using the stated $2,000 exclusion:
- Purchase price: $336,900
- Less excluded amount: $2,000
- Taxable amount: $334,900
- $334,900 ÷ $100: 3,349
- 3,349 × $0.37: $1,239.13
The estimated Tennessee transfer tax is therefore approximately $1,239.13.
In typical Clarksville practice, that charge is commonly allocated to the seller. However, the contract may assign it differently.
Mortgage recordation tax calculation
An 80% loan on a $336,900 purchase would be:
- Purchase price: $336,900
- Illustrative 20% down payment: $67,380
- Estimated loan amount: $269,520
- Less first $2,000 of indebtedness: $267,520
- $267,520 ÷ $100: 2,675.20
- 2,675.20 × $0.115: $307.65
The estimated mortgage recordation tax would be approximately $307.65.
The combined transfer-tax and mortgage-tax charges in this example would be about $1,546.78, before the separate recording fee, title insurance premium, lender charges, prepaid insurance, escrow deposits, and other closing expenses.
If your loan amount is higher or lower, the mortgage tax changes. A buyer financing 95% of the same purchase price would generally pay more mortgage recordation tax than a buyer making a 20% down payment.
Where do these charges appear at closing?
Your lender’s Closing Disclosure should identify the applicable taxes and other transaction charges before closing. The Closing Disclosure is designed to show your final loan terms, closing costs, credits, prepaid items, and estimated cash to close.
Review the document carefully for:
- Transfer tax
- Mortgage or indebtedness tax
- Deed recording fee
- Deed-of-trust recording fee
- Title search and title insurance
- Settlement or closing services
- Lender charges
- Seller credits
- Tax and insurance prorations
- Escrow deposits
If a charge appears different from the amount discussed during negotiations, ask your lender, title company, or Haus agent to explain the change before you attend closing. You can also review the Consumer Financial Protection Bureau’s Loan Estimate and Closing Disclosure guidance.
How does Kentucky transfer tax differ from Tennessee?
Kentucky uses a different transfer-tax system. Under Kentucky Revised Statutes § 142.050, the transfer tax is $0.50 for each $500 of consideration, or fraction of $500.
That equals approximately 0.1% of the purchase price.
For a $336,900 Kentucky purchase:
- $336,900 ÷ $500: 673.8
- Rounded up to the next $500 increment: 674
- 674 × $0.50: $337
The Kentucky transfer tax would therefore be approximately $337 before considering any exemption or special circumstance.
In many Kentucky transactions, the buyer generally pays the transfer tax by local or contractual practice. Kentucky law identifies the grantor named in the deed as the taxpayer, so your contract and closing documents should be reviewed carefully to determine how the charge is allocated in your specific transaction.
Kentucky does not impose the same separate statewide mortgage recordation tax structure described above for Tennessee. However, Kentucky buyers may still pay deed recording fees, mortgage recording fees, title charges, attorney or settlement fees, lender costs, insurance, and prepaid expenses.
If you are comparing Clarksville with Oak Grove or Hopkinsville, Haus’s guide to Kentucky versus Tennessee closing costs near Fort Campbell provides additional state-line context.
What closing-cost questions does Haus hear most often?
At Haus Realty & Management, buyers commonly ask whether transfer tax is included in their estimated closing costs, whether the seller can pay it, and why the mortgage tax changes when the loan amount changes.
The most important questions to ask are:
- Who is paying the transfer tax under my contract?
- What loan amount is being used to calculate the mortgage recordation tax?
- Are the transfer tax and mortgage tax listed separately?
- Are recording fees included in the estimate or shown separately?
- Is the title insurance premium included in the quoted closing-cost range?
- Are seller credits being applied to eligible costs under my loan program?
- Will the final amount appear on the Closing Disclosure?
Buyers should not rely only on a general percentage estimate. Your exact cash to close depends on the purchase price, loan program, down payment, interest rate, insurance premium, tax prorations, closing date, title services, and negotiated credits.
Freddie Mac’s Primary Mortgage Market Survey reported that the average 30-year fixed mortgage rate was 6.95% for the week ending September 17, 2026, up from 6.76% the prior week. That rate does not change the statutory tax formulas, but it can affect your monthly payment, purchasing power, discount-point decision, and ability to preserve cash for closing.
For additional planning guidance, review Haus’s articles on closing costs when buying a home in Clarksville and title insurance in Tennessee.
Should you confirm tax allocation before making an offer?
Yes. Ask for the transfer-tax and mortgage-tax allocation upfront, before you sign the purchase agreement.
The contract should identify whether the buyer or seller is responsible for:
- Tennessee transfer tax
- Mortgage or recordation tax
- Deed recording fees
- Mortgage recording fees
- Title insurance
- Settlement or closing charges
- Any negotiated seller credit
Knowing the allocation early helps you calculate your true cash requirement and compare offers accurately. It also reduces the risk of discovering at the closing table that a customary local expense was assigned differently in your agreement.
If you are buying in Clarksville, Montgomery County, or another Tennessee community, contact Haus for buyer-matched guidance. Our experienced team can help you evaluate the contract, estimate transaction costs, coordinate questions with your lender and closing provider, and move forward with clearer expectations.
This article is for general educational purposes and is not legal, tax, mortgage, or financial advice. Transfer taxes, recordation taxes, recording fees, lender requirements, and contract practices may change. Confirm the current calculation and payment allocation with your lender, title or settlement provider, real estate professional, and a qualified attorney when appropriate.
